Dinesh Rohira
5nance.com
As the domestic currency fell into fresh all-time low at 72.45 levels against the dollar coupled with widening of current account deficit, the Indian equity market breached below crucial psychological level on Monday. Further, the re-escalation of trade war between US and China continued to dent the market sentiment.
During the week under review, the Nifty index slipped from psychological level of 11,500 followed by 11,300 levels on closing basis to touch weekly low of 11,274 levels over a sustained selling regime. It extended the losses throughout the week to close at 11,287.50 levels, down by about 2.02 percent on week-to-week basis. The drag came from FMCG and consumer durable sector which were down by 4.26 percent and 5.07 percent, respectively. Healthcare sector was top gainer with about 0.61 percent on weekly basis.
After making a decisive breakdown from 11,500 levels on Monday to form a ‘Bearish Belt Hold’ candlestick pattern, the index made a ‘solid bearish’ candlestick pattern in a successive session on both daily and weekly price-chart, indicating a negative sentiment. The weekly RSI on chart stood at 58 levels which marks a lower zone, while MACD outlined a bearish regime with price trading below Signal-Line.
The immediate hurdle for the index is currently placed at 11,500 and support level is seen from 100-days EMA level placed at 11,076.
The extension of rupee breaching downward lower levels and weakening of macro fundamentals in emerging markets are likely to pose further short-term correction given a lack of trigger back home.
As internal advance-decline ratio continues to indicate a negative setup for the domestic market, the sideways direction favoring the downside regime is expected keep index volatile.
We advise to remain selective and avoid aggressive position buildup. We expect Nifty index to trade at 11,465 levels on upside and 11,080 levels on downside on week-to-week basis.
Here are the three top stock trading ideas which can give good returns:
Schneider Electric Infrastructure: Buy | Target: Rs 129 | Stop loss: Rs 97 | Upside: 13%
After consolidating from a price band of Rs 133 toward Rs 81 levels, Schneider Electric continued to trade on uptrend trajectory taking a strong support level at Rs 101-91 levels. Although it witnessed a periodic correction in closing trade, the scrip breached upward to touch high of Rs 120 levels which acted as strong long-term hurdle, and thus indicating a decisive buying trend at current level.
The momentum indicator outlined a positive trend with weekly RSI inching at 57 levels. Further, in coming session, MACD is also likely to make bullish crossover to trade above Signal-Line.
We have a buy recommendation for Schneider Electric Infra which is currently trading at Rs 114.65
Coffee Day Enterprises: Buy | Target: Rs 329 | Stop loss: Rs 290 | Upside: 8%
Coffee Day Enterprises made a strong rebound on its six-month price chart after consolidating from Rs 346-310 towards a low of Rs 246-239 levels, and managed to breakout from crucial level of 200-100-days EMA levels placed at Rs 263 and Rs 268 respectively.
The scrip touched a high of Rs 321 levels despite closing in negative trajectory on intraday basis, and clocked a gain of about 15 percent weekly basis. The weekly RSI level at 59 has shown a positive price divergence while MACD indicated a likelihood of bullish crossover in net few sessions.
We have a buy recommendation for Coffee Day which is currently trading at Rs 305.25
VIP Industries: Sell | Target: Rs 510 | Stop loss: Rs 567 | Downside: 6%
VIP Industries continued to remain under extended selling pressure in last one months, consolidating from higher band of Rs 633 levels towards low of Rs 554-535 levels in recent session. It further slipped below from 20-days moving-average level placed at Rs 571 levels to decline about 10 percent on weekly basis, and thus indicating a short-term pressure on price.
With formation of lower band on monthly chart, it also saw a subdue volume growth in same period.
The RSI on chart stood at 43 levels while MACD indicated no major momentum, and thus indicating selling regime.
We have a sell recommendation for VIP Industries which is currently trading at Rs 540.50
Disclaimer: The author is Founder & CEO, 5nance.com. 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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