Aditya Agarwal
After defending the 200-DMA, bulls showed some resilience and rebounded sharply during the initial part of the week. However, the up move got restricted near its daily 45-EMA and we saw quick profit booking during the mid-part.
The daily 9-45 EMA on price is negative hence the immediate trend is down however on a medium term basis as long as index is trading above 10,033 which coincides with the weekly swing low and the weekly 45-EMA the overall trend is still up.
Going forward, Nifty has an immediate support near 10,285 and any sustain move below this level will lead to further correction towards 10,210-10,141 levels. On the other side, 10,478 will act an immediate hurdle above which the index likely to rally towards 10,630.
In last 3 trading sessions, we have seen aggressive call writing at 10500 strike option and that will act as a stiff resistance zone for Nifty and similarly on lower side Put writing at 10300-10200 options will prove as immediate support.
Overall, we expect markets to consolidate between broad range of 10,240-10,520 levels for few sessions before giving any fresh breakout on either side.
Here is a list of top buy or sell trading ideas which could give up to 18 percent return in the short term:
Tata Steel: Sell around 615 – 620| Target 560| Stop Loss 648| Time frame 15 to 21 sessions| Return 8 percent
Looking at the daily chart, the stock has formed a Bearish Head & shoulder pattern and during last Friday, the stock confirmed its breakdown as it broke the neckline of the said pattern.
The daily RSI (14) convincingly broke the 40 levels. Recently, the stock had seen a pullback from its oversold zone, but the up move resisted near the neckline of said pattern.
Considering the above evidence, traders can go short in the range of 615 to 620 with a price target of 560 and a stop loss placed above 648.
Motherson Sumi: Sell around 315 – 318| Target 295| Stop loss 330| Time frame 15 to 21 trading sessions| Return 6 percent
Looking at the daily chart, the stock has been under tremendous pressure and nosedived sharply from its all-time high of 395.60. Subsequently, the stock found support near 301 and rebound from its oversold zone.
Traders are advised to go short in a range of 315 – 318 with a price target of 295 and Stop loss placed at 330 on a closing basis.
Divi’s Laboratories Ltd: Buy around 1075 – 1060| Target 1260| Stop loss 978| Timeframe 15 to 21 trading session| Return 16 percent
On the weekly chart, the stock has been consolidating a range of 1140 to 980 and the lower band of the range coincided with the multiple supports.
Recently, Davis lab saw strong buying interest and as a result, stock surpassed its weekly swing high. Looking at the weekly chart, the Bollinger band has compressed significantly indicating shift in volatility.
Traders are advised to buy this stock in a range of 1075 to 1060 with a price target of 1260. A stop loss should be placed below 978.
MAJESCO: Buy around 475- 470| Target 565| Stop loss 440| Time frame 15 to 21 trading session| Return 18 percent
After posting a fresh 52-weeks high of 604, the stock corrected gradually in past few weeks. However, the fall got arrested near 440, as this level coincided with its previous resistance zone.
In line with the expectation, stock saw a decent bounce from its support zone. The weekly RSI (14) has signaled an oversold position. Traders can accumulate this stock in a range of 475 to 470 with a price target of 565. A stop loss should be placed below 440.
Disclaimer: The author is Head of Technical Research at Way2Wealth Brokers Pvt. Ltd. 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.
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