Shitij Gandhi
Indian market continued witnessing selling pressure on May 12 taking cues from weak global markets as growing worries over the second wave of coronavirus infections hurt investor sentiments.
However, some lower-level buying was seen in the latter part of the day on the back of expectations of the stimulus package from the government.
On the derivatives front, Call writers were seen shifting to the lower band which points towards a limited upside in Nifty.
The maximum open interest in Calls is placed at 9,500 strike while 9,000 strike holds the maximum open interest in Puts.
In the coming session, we expect the market to remain volatile and at the current juncture, traders should remain focussed on stock-specific moves and are advised to trade cautiously, tracking global markets.
Here are two trading ideas for the next 3-4 weeks:
After surpassing its 200-days exponential moving average on daily charts, the stock is maintaining its uptrend and can be seen trading in a rising channel with consistent buying seen at support levels.
At the current juncture, the secondary oscillators are once again showing positive divergences which point towards the next upside into the prices moving forward.
Traders can accumulate the stock in the range of Rs 350-358 levels for the upside target of Rs 414 levels with a stop loss below Rs 315.
AIA Engineering | Buy | LTP: Rs 1,692 | Target price: Rs 1,930 | Stop loss: Rs 1,450 | Upside: 14%
After falling back below Rs 1,100 levels in late March 2020, the stock saw a V-shape recovery on daily charts and once again reclaimed Rs 1,600 in a short span of time.
At the current juncture, the stock has been witnessed consolidating in a broader range of Rs 1,400-1,600 from the last few weeks with the stock maintaining its rising channel with the formation of the higher high and higher bottom pattern.
On May 12, the stock has given a breakout above the 200-days exponential moving average on the daily interval and has given breakout above the consolidation zone as well.
Traders can accumulate the stock in the range of Rs 1,620-1,650 for the upside target of Rs 1,930 with a stop loss below Rs 1,450.
(The author is Senior Technical Analyst at SMC Global Securities)
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