For almost nine trading sessions, the Nifty50 has been consolidating within 14,700-14,200 levels, representing a rangebound movement, hence any breakout on either side may signal further direction. On the daily chart, the index continues to trend lower, forming a lower top and lower bottom formation, indicating a short-term downtrend.
The next higher levels to be watched are around 14,600 levels. Any sustainable move above 14,600 may cause a pullback towards 14,700-14,800, which should be used as an exit opportunity for short-term traders.
On the downside, any violation of an intraday support zone of 14,400 may signal weakness towards 14,300-14,200 levels. The daily strength indicator RSI and the momentum indicator Stochastic both have turned bullish, which signals possible pullback action at lower levels.
Here is the list of three stocks to bet on for the short term:
Usha Martin: Buy | CMP: Rs 42 | Stop Loss: Rs 36 | Target: Rs 48-53
The stock is in a strong up trend across all the time frames for a series of higher top and higher bottoms. With strong gains of 10 percent on April 26, the stock has witnessed a short-term breakout along with a huge volume spurt, which supports increased participation in the rally. The buying was observed from its 20-day simple moving average (36.50) levels, which reconfirms a bullish sentiment ahead. The daily and weekly strength indicator RSI is in a bullish mode and quoting above the 50 mark, which supports rising strength.
ICICI Lombard General Insurance Company: Buy | CMP: Rs 1,454 | Stop Loss: Rs 1,413 | Target: Rs 1,500-1,550
With the current price movement, the stock has decisively broken out its four months' 'Down-Sloping' trendline at Rs 1,438 on a closing basis, which signals trend reversal on the short-term charts. This breakout is accompanied by high volumes, which point to increased participation on a breakout. Since the past couple of weeks, the stock has firmly got support from its 200-day SMA (Rs 1,371) that remains a crucial support zone in the near term. The daily strength indicator RSI has turned bullish from the 50- mark, which signals strength at current levels.
Balaji Amines: Buy | CMP: Rs 2,092 | Stop Loss: Rs 2,010 | Target: Rs 2,180-2,250
The stock is in a strong uptrend across all the time frames for a series of higher top and higher bottoms. In the past couple of sessions the stock has gained good buying momentum from its 20-day SMA (Rs 1,814), which remains a crucial support zone. This buying has been observed in rising volumes, which signifies strength in the rally. The daily and weekly strength indicator RSI is in bullish mode and quoting above the 50-mark that supports rising strength.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are his own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.