Weak global cues, as well as the September series expiry, led to some volatility on the D-Street which pushed benchmark indices below crucial support levels. The S&P BSE Sensex and Nifty50 fell by about 4 percent each for the week ended September 25.
Nifty50 managed to recoup some losses on September 25 and closed above 11,000, but the near-term trend for the index still remains on the downside. Experts are of the view that for bulls to reclaim control, a break above 11,250-11,300 is required.
“Market has remained overbought for an extended period and the emergence of a big bearish candle has turned the immediate outlook negative,” Umesh Mehta, Head of Research, Samco Group told Moneycontrol.
“However, the Nifty index has broken the rising channel on a daily chart drawn from March lows. Going ahead traders should remain watchful of market bounces, as the rally will face selling pressure as now the lower channel will act as resistance,” he said.
Shah is of the view that a close above 11,250 will confirm the bullish scenario, otherwise continue to maintain a bearish outlook going ahead in the October expiry. A decisive break below 10850 may trigger a fall up to 10500-10400 levels.
Here is a list of top 10 short-term trading ideas by experts for the next 3-4 weeks:
Expert: Sacchitanand Uttekar, DVP – Technical (Equity), Tradebulls Securities
HUL was the first stock to scale above its COVID-hit drop during the month of March to close above its February 2020 highs. Since then, the stock has witnessed major underperformance despite its businesses running relatively smoother during the lockdown restrictions.
The recent decline has been gradual and constrained within a downward sloping channel. The fall seems to be arresting now as the stock witnessed a low rollover followed by the occurrence of a ‘Bullish Hammer’ formation on its weekly scale.
Its relative strength is also placed around its historical support zone while its monthly price swing lows are in close proximity towards its 20-months EMA which is now placed around Rs 1,990.
The stock has been respecting its 20-month EMA support since its uprising post February 2017, and never closed below the same.
Hence, one can start accumulating the stock with a stop below Rs.1880 for an upswing back towards Rs.2500 zone as the focus seems to get back on consumptions & defensives.
The stock is now in close proximity to its support range. It has been oscillating within this said range of 270-200 for more than 13 quarters.
With sector showcasing revival signs, and the commercial activity resuming in many states, the floor looks better to deploy fresh longs.
Technically, it witnessed a ‘Bullish Hammer’ candlestick formation near its 200-weeks EMA. While the 61.8% retracement zone of its prior impulse wave also placed at Rs.210 which looks like a formidable base formation zone for the stock.
Folio longs could be accumulated up to Rs.210 with a stop below Rs.190 for a review once above Rs.260 mark.
Secular upmove remains intact as the stock witnessed consolidation in forma of a ‘Broadening formation’ as it approached its long term resistance zone around Rs.770.
The oscillation within the formation is also above its 200 DEMA been placed around 685. The recent ‘Bullish Belt-Hold’ formation within the Broadening structure established a firm ground notification around Rs 700 mark.
Contra long within the formation could be deployed once above Rs.735 for an up move towards Rs.900 & beyond with a stop loss below Rs.695.
On its daily scale, the ongoing corrective move within the ‘Falling Wedge’ formation seems to be arresting as the stock witnessed a ladder bottom kind off formation with a Bullish Belt Hold occurrence at the pattern support of Rs. 1000.
The bullish implication of the pattern would require a validation move above Rs.1100 despite breaking below Rs.1000 from hereon.
Traders could consider building fresh longs as the price correction within the ‘Wedge’ formation has covered 70% of its time area & could see a breakout sooner than later.
Once the stock move above Rs.1100, it may cruise towards Rs.1250, hence longs could be accumulated with a stop below Rs.970 from hereon.
Weak sectoral strength and a weekly close below its crucial lower bound of Rs.170 along with a convergence of its 5 & 20-weeks EMA could result in further weakness.
Short positions should be continued with a stop above Rs. 188 as expected, and a bounce back towards Rs.170- Rs.175 zone would make the opportunity much rewarding for a final move towards Rs.150.
Expert: Gaurav Garg, Head of Research at CapitalVia Global Research Ltd
The stock has witnessed a reversal from its support level, and further strength can be gained if it sustains above the level of Rs 512.The crossover of its short and medium-term averages on the daily charts with strong
Volumes are showing signs of further upside. RSI has also turned positive on the weekly charts, indicating limited weakness in the stock.
The stock is forming a bullish flag pattern, and if the stock somehow sustains above 5203 that might lead to positive momentum. The stock has also seen a significant addition of volumes in recent days. The risk-to-reward ratio is favorable at this juncture of time.
The stock seems to have bounced from its support on the daily charts and a breakout from the level of 837 might result in further strength which might lead the stock to break its weekly high.
Expert: Sameet Chavan, Chief Technical & Derivatives Analyst at Angel Broking
The stock has nosedived in the recent broader market sell-off. Due to the relentless fall, the prices entered extremely oversold territory, and hence, some relief was very much on cards.
Last Friday, we witnessed a good broad-based recovery in the market and this stock participated well in the move.
Due to this price development, the stock is well poised for further recovery and hence, aggressive traders can bet at the current levels for a pullback move by following strict stop losses.
IT sector has been the flavor worldwide in this difficult time of the pandemic. Stocks from this space have given stellar gravity-defying moves over the past six months.
But we are now observing the Nifty IT is reaching a zone of key Fibonacci ratios and for the first time in recent past, we have seen some profit-taking in these stocks.
This may sound a bit contradictory but the way TCS corrected last week, it has certainly dented the recent optimism, and hence, momentum traders can look to sell for a target of Rs 2,330 in the coming days.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.