Podcast | Stock picks of the day: Immediate support for Nifty seen around 11,250-11,300 levels

The Nifty mid-cap and small-cap indices plunged 7.5 percent and 7 percent, respectively, in the same period. The Nifty Small-cap Index breached the crucial triple bottom support of 6,000 during the week and is now inching lower towards the next support of 5,660.

The Nifty breached the crucial trend line support of 11,570 last week, which is expected to interchange its role as resistance. A 200 day EMA in Nifty is currently placed at 11,297 which is likely to act as immediate support.

Far support stands around 11,100 levels which coincide with the 200 day SMA which is placed around 11,130 levels. Oscillators and Indicators on Nifty short term charts have turned bearish.

The Bank Nifty last week breached its 50 and 100-DMA and closed below that. The level of 30,300 has become a strong resistance and unless that is taken out, one should remain bearish in the index.

To conclude, the short-term trend for the Nifty remains bearish until the resistance of 11,600 is crossed decisively. On the downside, immediate support is seen in the vicinity of 11,250-11,300 levels.

Any close below 11,250 levels would lead to an extension of the fall towards 200 day SMA which is placed around 11,100 levels.

In the Bank Nifty, one should remain bearish until the level of 303,00 is taken out decisively. Support for the Bank Nifty stands around 28,800 levels

Here is a list of top three stocks which could give 6-7 percent return in the next three to four weeks: MCX India: Buy| LTP: 877| Target: Rs 940| Stop-Loss: Rs 840| Upside 7 percent
MCX has given a breakout on the daily chart by closing above the resistance level of Rs 870 levels. It closed at an 11-month high with higher volumes.

In the derivatives segment, we have seen a short build-up in the Futures’ segment. The stock price is trading above its 5, 20 and 200-day SMA indicating that the stock is in an uptrend in all time frames.

Oscillators and momentum Indicators like RSI and MACD is showing strength on daily and weekly charts. Therefore, we recommend to accumulate MCX for the target of Rs 940 and keep a stop loss below Rs 840.

State Bank of India: Sell| LTP: 351| Target: Rs 330| Stop-loss Rs 363 | Downside 6 percent
The stock price gave a breakdown on the daily chart by closing below the support level of Rs 354 levels. The momentum indicators and Oscillators like MACD and RSI are showing weakness on the daily as well as weekly charts.

The short-term trend of the stock is bearish with stock price trading below its 5 and 20-day SMA. In the derivatives, we have seen the short build-up in the SBI Futures’.

Therefore, we recommend selling SBI at CMP of Rs 351 and average at Rs 358 for the target of Rs 330, and keep a stop loss above Rs 363.

Bata India: Sell| LTP: Rs 1280| Target: Rs 1,200| Stop-Loss: Rs 1,325| Downside 6 percent
Bata India has broken down on the daily chart by closing below the support level of Rs 1310 levels last Friday with higher volumes.

On the derivatives front, we have seen the aggressive short build-up in the Bata Futures’ where we have seen more than 70 percent addition during the July series till now with price falling by nearly 10 percent.

Oscillators and momentum Indicators like RSI and MACD is showing weakness on daily and weekly charts. Therefore, we recommend selling Bata India for the target of Rs 1,200, and keep a stop loss above Rs 1,325.

(The author is Senior Technical & Derivatives Analyst at HDFC Securities)

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