Shitij Gandhi
After opening a tad higher on March 17, the Indian market gave up all the gains and slid sharply in the last hour of trade with Nifty closing below 9,000 levels and Bank Nifty below 22,200 levels as fears over the coronavirus pandemic loomed over the market.
On the technical front, Nifty has slid below its 100-days exponential moving average on monthly charts which can trigger further selling pressure into the prices in coming sessions once again.
On the derivatives front, the heavy short build-up has been witnessed into the index from the last few sessions, which will once again limit any sharp upside into the prices.
On the higher side, as long as Nifty is trading below the psychological level of 10,000, the undertone will likely to remain bearish and any bounce into the prices should be used for creating fresh shorts.
Additionally, the Indian Volatility Index (VIX) has spiked above 60 levels which also indicates further downward momentum with some wild swings on the cards.
Here are three sell recommendations for the next 3-4 weeks:
The stock has witnessed a series of decline from the last few sessions and slid below its 100-days exponential moving average on a daily interval which is placed at 15,064 levels.
At the current juncture, prices are trading in a downward sloping channel with the formation of the lower bottom pattern. The immediate support for the stock is placed at Rs 14,000 below which further downside should resume in coming sessions.
So, traders can short sell the stock in the range of Rs 14,540-14,600 for the downside target of Rs 13,700 with stop loss
above Rs 15,100.
After consolidating in the range of Rs 7,000 to Rs 7,500 levels, the stock has given a sharp breakdown below its 200-days exponential moving average on the daily charts and went below Rs 5,000 levels to mark its 52-week low of Rs 4,803 on March 13.
However, due to short-covering, once again prices are holding above Rs 5,600 at the current juncture but the broader structure is still weak as prices are holding well below its short and long-term moving averages.
On a shorter time frame, the stock has formed a rounding top pattern which could trigger another round of downside momentum into the prices in the coming sessions.
Traders can short sell the stock in the range of Rs 5,600-5,650 for the downside target of Rs 5,000 with a stop loss above Rs 6,000.
NTPC | Sell | LTP: Rs 88.05 | Target price: Rs 78 | Stop loss: Rs 100 | Downside: 11%
The stock can be seen maintaining its downtrend and falling in a sloping channel with the formation of the lower high and lower bottom pattern.
A few weeks back, the fresh breakdown was observed below the descending triangle pattern which triggered the follow-up selling into the stock as prices breached the psychological level of Rs 100-mark as the stock tested its 52-week low of Rs 81.25 last week.
Now once again, marginally higher volumes have been witnessed at the current juncture with a fall in price which should move the stock towards new lows in the coming sessions.
Traders can short sell the stock in the range of Rs 89-92 for the downside target of Rs 78 with a stop loss above Rs 100.
(The author is Senior Technical Analyst at SMC Global Securities)
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