The market faced severe selling pressure in the week ended February 24 and closed at a four-month low following a hawkish commentary by Fed officials and increase in US bond yields and the dollar index.
The Nifty50 shed 2.67 percent during the week, the biggest weekly loss since June 2022, to close at 17,466 and formed a large, bearish candlestick pattern on the daily charts, with decisively breaking 200-day EMA (exponential moving average 17,590). It also settled below long upward sloping support trendline adjoining the lows of March 2020 and of June 2022.
Hence, the next support is placed at 200-day SMA (simple moving average - 17,368) which coincides with Budget day's low as breaking of the same can drag the Nifty towards 17,000 level, whereas the near-term resistance is expected at 17,600 followed by 17,700-17,800 area, experts said.
"There is a possibility that the index may head towards 17,200-17,100 levels in the coming sessions as 17,700-17,750 will act as a strong resistance," Mitesh Karwa, Research Analyst at Bonanza Portfolio, said.
In the worst-case scenarios, Sameet Chavan of Angel One feels the Nifty may find support around its intermediate levels of 17,000–16,700.
"Taking the current situation into consideration, the Nifty is placed around its sacrosanct support zone 17,350 which coincides with the 200-day SMA. Hence, till the time we do not break below this level, we remain hopeful of some recovery in coming week," he said.
Options data suggests a broader trading range in between 17,200 to 17,700 zones due to higher volatility while immediate trading ranges in between 17,200 to 17,600 zones.
Let's take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the February 24 closing prices:
Expert: Subash Gangadharan, Senior Technical & Derivative Analyst at HDFC Securities
GAIL: Buy | LTP: Rs 103 | Stop-Loss: Rs 96 | Target: Rs 115 | Return: 11 percent
GAIL has shown relative strength last week. While the Nifty has lost 2.67 percent last week, GAIL has gained a healthy 7.92 percent. In the process, the stock has closed above its recent trading range on the back of above average volumes, which augurs well for the uptrend to continue.
Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA. Momentum readings like the 14-week RSI (relative strength index), too, are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup too looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between Rs 101-105 levels, with stop-loss at Rs 96 while target at Rs 115.
Hindalco Industries: Sell | LTP: Rs 415 | Stop-Loss: Rs 438 | Target: Rs 375 | Return: 10 percent
Hindalco is in a short term downtrend as it has been making lower tops and lower bottoms for the last several weeks. Last week, the stock broke down from its recent trading range, indicating that the downtrend looks set to continue.
Technical indicators are giving negative signals as the stock is now trading below the 20-day and 50-day SMA. Momentum readings like the 14-week RSI too are in decline mode and not oversold, which implies potential for more downsides.
We therefore expect the stock to correct further in the coming sessions. Sell between Rs 414-418 levels, with a stop-loss at Rs 438 while downside target at Rs 375.
Vedanta: Sell | LTP: Rs 294 | Stop-Loss: Rs 305 | Target: Rs 280 | Return: 5 percent
Vedanta is in a short term downtrend as it has been consistently making lower tops and lower bottoms for the last several weeks after breaking the support of Rs 313. Recently, the stock reacted from the 20-day SMA and continued to trend lower.
With the stock trading below key moving averages like the 20 and 50-day SMA, the 14-week RSI in decline mode and the intermediate technical setup looking negative, we believe the stock is headed lower in the coming weeks.
We therefore recommend a sell between Rs 293-297 levels, with a stop-loss at Rs 305 and downside target at Rs 280.
Expert: Shrikant Chouhan, Head of Equities Research (Retail) at Kotak Securities
TCS: Sell | LTP: Rs 3,400 | Stop-Loss: Rs 3,580 | Target: Rs 3,250 | Return: 4.4 percent
The stock is making a series of lower tops and lower bottoms. It was at Rs 3,575 on February 16 and is currently trading at Rs 3,400, which is below the 20-day SMA level.
According to the major oscillator, it is turning negative, which is an indication of further weakness.
From a trading perspective, it is advisable to sell at the current level and on a rally of Rs 3,450. Place the final stop-loss at Rs 3,580. On the downside, it will find major support at Rs 3,350 and Rs 3,250.
SAIL: Sell | LTP: Rs 83 | Stop-Loss: Rs 86 | Target: Rs 75 | Return: 10 percent
It has formed a bearish continuation pattern on the daily chart. A lower top and breaking of a flag formation is indicating further weakness in the near term.
Depending on the formation, the stock may slide further toward Rs 79 or Rs 75 in the coming weeks. The strategy should be to sell the stock at the current level and at Rs 85. However, for that, it is mandatory to keep the stop-loss at Rs 86.
GNFC: Buy | LTP: Rs 552 | Stop-Loss: Rs 520 | Target: Rs 600 | Return: 9 percent
The stock is forming a typical bullish consolidation structure since the beginning of the month of December. It is diverging positively and it is on the verge of absorbing the selling pressure, which is at Rs 565.
From a trading point of view, we should be buyers but in tranches. Buy 50 percent at current levels and the rest at Rs 535. On higher levels, it has scope for a rise towards Rs 565 and Rs 600. For the same, place a stop-loss at Rs 520.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Petronet LNG: Buy | LTP: Rs 222 | Stop-Loss: Rs 211 | Target: Rs 239 | Return: 8 percent
The stock had recently witnessed a breakout above its falling trendline resistance on the weekly charts. After an upmove upto Rs 230, prices retraced back towards the support and it now witnessing a positive momentum indicating possibility of a resumption of the uptrend.
The momentum readings on the weekly charts are in positive zone. Hence, short term traders can look for buying opportunities around current market price of Rs 221 for near term targets of Rs 230 and Rs 239. The stop-loss for long positions should be placed below Rs 211.
Expert: Mitesh Karwa, Research Analyst at Bonanza Portfolio
Zomato: Buy | LTP: Rs 54.45 | Stop-Loss: Rs 51.50 | Target: Rs 65 | Return: 19 percent
On a weekly basis, the price has witnessed long bearish trend from its all-time highs which is placed at Rs 169. Recently the price has taken support of its prior demand zone with bullish reversal candlesticks "Morning Star". The price has shifted just above the 9-day EMA with spurt volume which indicates immediate support to the price.
At the same time, the indicator MACD (moving average convergence divergence) suggested a positive crossover confirming long position. However, the price has faced immediate resistance of 20-day EMA which is placed at Rs 57.10.
Hence, based on the above-mentioned technical structure, one can initiate a long position in Zomato at CMP Rs 54.80 or a fall in the price till Rs 54 levels can be used as a buying opportunity for the upside target of Rs 60 & Rs 65. However, the bullish view will be negated if Zomato closes below the support level of Rs 51.50.
Siemens: Buy | LTP: Rs 3,246 | Stop-Loss: Rs 3,050 | Target: Rs 3,610 | Return: 11 percent
On a weekly timeframe, the price has been rising continuously with higher highs and higher lows formation. In addition, the price has also been trading above 9 and 20-day exponential moving averages from the last few weeks indicating a strong bullish trend. Recently the price has given a breakout of the Ascending Triangle Pattern confirming the continuation of the bullish trend.
At the same time, the MACD indicator suggested also a positive crossover with rising histograms and the daily Relative Strength Indicator traded above 60 level which indicates bullish strength.
Hence, based on the above-mentioned technical structure, one can initiate a long position in Siemens at CMP Rs 3,245, or a fall in the price till Rs 3,207 levels can be used as a buying opportunity for the upside target of Rs 3,610. However, the bullish view will be negated if Siemens closes below the support level of Rs 3,050.
Kirloskar Industries: Buy | LTP: Rs 2,204 | Stop-Loss: Rs 2,110 | Target: Rs 2,430 | Return: 10 percent
On the daily charts, the stock has given an ‘Ascending triangle pattern’ breakout with good volume. In addition, the stock has traded above the important near-term moving average. Simultaneously, the technical indicator Ichimoku cloud suggests that the price is trading above the conversion and base line which shows a Positive trend in the counter.
The MACD histogram is hovering in positive territory with inclining trajectory confirming bullish trend may continue. A momentum indicator RSI (14) is reading above 50 levels, which suggests a bullish move for the near term.
Hence, based on the above-mentioned technical structure, one can initiate a long position in Kirloskar Industries at CMP Rs 2,204, or a fall in the price till Rs 2,195 levels can be used as a buying opportunity for the upside target of Rs 2,430. However, the Bullish view will be negated if stock closes below the support level of Rs 2,110.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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