Nifty on June 16 opened marginally lower and remained under pressure. The previous day's Doji pattern formed at the top indicated an evening star kind of a pattern and yesterday’s sell-off has given the first indication of a probable short-term top.
Market participants took money off the table ahead of the US Fed meet outcome.
Nifty's 50-day exponential moving average and 20-day exponential moving average have strong positive slops and the difference between them is also expanding. So, in the coming days, major supports will be seen near 15,535-15,190. On the higher side, 15,900-15,950 will act as resistance.
Here are two sell calls for the next few days:
Tata Steel | LTP: Rs 1,140 | Target price: Rs 1,060 | Stop loss: Rs 1,186 | Downside: 7%
Tata Steel had seen a sharp fall in May from the levels of Rs 1,246 to Rs 1,072. Then 20-day exponential moving average gave support and Tata Steel retraced about 50 percent of the total sell-off.
At the level of Rs 1,180-1,186, it created a Doji and indicated the rejection candle for bulls above that.
Yesterday's sell-off has indicated that there will be further downside in the stock and a low of Rs 1,072 will be tested.
The 50-day exponential moving average is at Rs 1,046 and the slop is upwards so it can become support.
ICICI Bank | LTP: Rs 639.15 | Target price: Rs 584 | Stop loss: Rs 667 | Downside: 9%
Bank Nifty remained an underperformer in the recent rally which started from 14,050 on Nifty.
Recently, many of them managed to retrace the losses made during February to April period, but were not able to cross the highs of February.
ICICI Bank is one of those stocks. It made a high of Rs 679.40 in February and tested the lows of Rs 531.50 in May.
The stock managed to retrace 88.20 percent of the fall and made a lower high of Rs 665.
In the last few session, it witnessed selling and resumed a downtrend. The 200-day exponential moving average is at Rs 548. Slop is bullish so it will work as a major support on the downside.
(The author is Research Head, Bonanza Portfolio)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.