On bounce Nifty will face strong resistance at 11,400-11,450 levels while next support is placed around 11,200-11,170 levels, says Shitij Gandhi of SMC Global Securities
SMC Global Securities
Nifty dragged down sharply on back of liquidation of long positions and continuous short buildup by FIIs. At current scenario derivative data remains negative and it indicates towards probability of further profit booking.
We have observed call writing and put unwinding in recent trading sessions. The call writers were seen active in 11,400 and 11,500 strike which indicates limited upside moving forward. The heavy sell-off in index clearly points towards lack of buying interest and discomfort in the market.
We are seeing continuous short buildup by FIIs which indicates caution ahead and more weakness in coming sessions. On bounce the index will face strong resistance at 11,400-11,450 levels while next support is placed around 11,200-11,170 levels.
Here are the top three stock trading ideas which can give good returns in the near term:Syngene International: Rating: Buy | Target: Rs 700 | Stop loss: Rs 590 | Upside: 11%
The stock has been trading in a range of Rs 560-620 from last more than three months and this week it has given the consolidation breakout above the key resistance level. It has also taken support at its 200-day exponential moving average on daily interval multiple times. The hefty volumes with rise in prices suggest for more upside in prices moving forward.
So, traders can accumulate the stock in the range of Rs 630-640 for the upside target of Rs 700 with stop loss below Rs 590.Grasim Industries: Rating: Buy | Target: Rs 1,160 | Stop loss: Rs 980 | Upside: 11%
The stock has been maintaining its downtrend since the beginning of the year and slide well below its 200-day exponential moving average in recent past. However this week once again prices surpassed well above its long-term moving averages on daily charts along with positive divergence on secondary indicators.
Moreover, the stock is also on verge of breakout above the ascending triangle pattern visible on daily interval.
So, traders can accumulate the stock in the range of Rs 1,045-1,065 for the upside target of Rs 1,160 with stop loss below Rs 980.
Jindal Steel & Power: Rating: Buy | Target: Rs 250 | Stop loss: Rs 207 | Upside: 12%
After taking support at its 100-day exponential moving average on weekly interval stock recovered sharply to regain the momentum above its 200-day exponential moving average on daily charts.
Additionally, the stock has also given breakout above the ascending triangle pattern on daily charts which is generally traded as bullish pattern.
So, traders can accumulate the stock in the range of Rs 223-230 for the upside target of Rs 250 with stop loss below Rs 207.Disclaimer: The author is Senior Research Analyst at SMC Global Securities. 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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