For the second consecutive week, the domestic market has been trading under pressure amid weak global cues.
Nifty ended in the red for most of the trading sessions this week and at this juncture, it is trading with a cut of 1.73 percent and has almost retested 12,000-mark, whereas Nifty Bank index has lost 1.90 percent so far during the week.
Until the previous week, we expected a bounce in the market towards 12,300–12,400. However, the selling pressure aggravated at higher levels and Nifty took a U-turn from the high of 12,272.
Now at this point, Nifty is hovering above the psychological support of 12,000. A breach of this mark might drag the index towards the previous important swing low of 11,930.
If there is any positive surprise from the Union Budget, there could be a bounce towards 12,300–12,500. However, we still advise traders to use the bounce as an exit opportunity since we are witnessing a negative divergence in the monthly chart of Nifty.
Here are two buy and one sell call for the next 3-4 weeks:
Berger Paints | Sell | LTP: Rs 568 | Target: Rs 540 | Stop loss: Rs 585 | Downside: 5%
The stock has been trading with an upside momentum since July 2019 and has rallied around 90 percent during this timeframe without any meaningful correction.
On the lager degree chart, the stock has faced a resistance near Rs 580 mark, which is the 161.8 percent Fibonacci retracement (golden ratio) on the previous move.
The RSI on the daily as well as weekly charts has confirmed a negative divergence, which indicates a possibility of a corrective move.
Traders are advised to sell the stock on a bounce near Rs 570 for a target of Rs 540 with a stop loss of Rs 585.
Bharti Airtel | Buy | LTP: Rs 487.05 | Target: Rs 540 | Stop loss: Rs 465 | Upside: 11%
The stock recently confirmed a multiyear breakout above Rs 508-mark after a consolidation of over 12 years. The price action was supported by a decent rise in volumes, which adds more conviction for the upside.
Recently, the stock re-entered the breakout zone on the back of profit-booking, which could be a buying opportunity.
Traders are advised to buy the stock near Rs 490 for an upside target of Rs 540 with a stop loss of Rs 465.
Exide Industries | Buy | LTP: Rs 199.10 | Target: Rs 207 | Stop loss: Rs 189 | Upside: 4%
Recently, on the daily chart, Exide Industries confirmed a range breakout above Rs 198 and has been consolidating near this level.
The stock has managed to clear and sustain above its 200-day simple moving average, which is a sign of strength.
The placement of the daily RSI suggests that the ongoing downside could be a buying opportunity. Traders are advised to buy the stock on a dip near Rs 195 for an upside target of Rs 207 with a stop loss of Rs 189.
(The author is Senior Technical Analyst at IndiaNivesh Securities)Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.