Aditya Agarwala
The Nifty index Futures continued to slide lower for the second month in a row making it 10 percent decline from the record highs. Further, it has broken down from a broadening wedge pattern along with a close below the 200-DMA, affirming weakness dominant in the markets at the moment.
A sustained trade below 10,050 can accelerate the fall to levels of 9,930-9,700. However, a close beyond 10,400 levels with healthy volumes can pause the current bearishness triggering a short covering to levels of 10,640-10,730.
Moreover, the relative strength index or the RSI has turned down from the neutral levels of 50 on two occasions in recent pullbacks suggesting further weakness in the coming trading sessions.
Here is the list of stocks which can give up to 11 percent return:
Arvind Ltd: SELL| Target Rs345| Stop Loss Rs410| Return 11%
On the weekly chart, Arvind Ltd. (ARVIND) is on the verge of a breakdown from the channel support placed at Rs382.
A sustained trade below the support line of the pattern will trigger the start of a bear trend dragging the stock lower in the coming trading sessions. On the daily chart, the stock has broken down from a head & Shoulders pattern confirming a bear trend reversal.
Moreover, RSI has turned down from the neutral level of 50 affirming a range sift in favour of the bears. The stock may be sold in the range of Rs388-384 for targets of 360-345, keeping a stop loss below Rs410.
Tata Elxsi Ltd: SELL| Target Rs880| Stop Loss Rs1020| Return 10%
On the weekly chart, Tata Elxsi Ltd is on the verge of a breakdown from the neckline of a Head & Shoulders pattern suggesting bearishness building up in the stock. The neckline of the pattern is placed at 974, a sustained trade below this neckline can trigger sharp corrections.
Moreover, on the daily chart, it has broken down from a trend line support affirming further weakness in the stock. The RSI has turned downwards breaking out of the lower band of the Bollinger Bands suggesting lower levels in the coming trading sessions.
The stock may be sold in the range of 983-978 for targets of 915-880, keeping a stop loss below 1020.
Maruti Suzuki India Ltd: BUY| Target Rs9760| Stop Loss Rs8400| Return 11%
On the weekly chart, Maruti Suzuki India Ltd. is taking support at the lower end of a rising channel placed at 8700 levels.
A sustained trade above 8700 can resume the uptrend taking it higher. On the daily chart, the stock is on the verge of a breakout from channel resistance placed at 9000 after forming a consolidation base around 8600 levels.
The stock may be bought in the range of 8750-8800 for targets of 9450-9760, keeping a stop loss below 8400.
Disclaimer: The author Technical Analyst at YES Securities (I) Ltd. The views and investment tips expressed by investment expert 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.
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