The market, after hitting fresh record highs, fell for the second straight week ended December 16 as central banks commentaries indicated that the rate hikes were not over yet. Growing recession fears also weighed on sentiment.
The Nifty50 lost more than 3 percent from its new record high, and corrected over a percent last week, forming bearish candle with long upper shadow on the weekly scale. Also, there was lower high formation for the second consecutive week, while on the monthly charts, the index has formed bearish piercing line pattern, indicating the sellers have more power over buyers.
The selling can be extended in the coming sessions with support at 18,100-18,000 levels, however, on the higher side, the index may face hurdles at 18,500-18,700 levels if it holds these supports, experts said.
"Ideally looking at the price structure, the development does not augur well for the bulls. Only a follow through selling may lead to further weakness towards 18,130 - 18,000 - 17,900 in coming sessions. Even if this scenario pans out, we do not expect the correction to aggravate below the lower end of this support range," Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One said.
He believes the higher degree up trend remains intact as long as the market manages to hold this. Since market was deeply overbought, this must consider as a running correction, he said.
On the flipside, he feels 18,450 - 18,600 are to be treated as immediate hurdles. "If bulls have to regain their strength, 18450 needs to be surpassed with some authority."
Sameet Chavan advised traders to stay light for a while.
Let's take a look at the top 10 trading ideas by experts for the next three-four weeks. Returns are based on the December 16 closing prices:
Expert: Shrikant chouhan, Head of equity research (retail) at Kotak Securities
Tata Consultancy Services: Sell | LTP: 3,240 | Stop-Loss: Rs 3,280 | Target: Rs 3,020 | Return: 8 percent
The stock has formed a bearish distribution formation on the daily chart. On last Friday, it closed just above the neckline support.
Below Rs 3,220 level, it would slide towards Rs 3,020 with minor support at Rs 3,100. The strategy should be to sell TCS below the Rs 3,220 level and keep the stop-loss at Rs 3,280.
Sun TV Network: Sell | LTP: Rs 500 | Stop-Loss: Rs 516 | Target: Rs 450 | Return: 10 percent
The stock has formed a rising leg formation, which is an indication of a weak pullback to the recent sell-off from the high of Rs 568 to Rs 473.
Based on this, the stock would continue the downward journey towards Rs 473 or Rs 450 levels. The strategy should be to sell the stock at current levels and place a stop-loss at Rs 516 for the same.
ABB India: Buy | LTP: Rs 2,838 | Stop-Loss: Rs 2,700 | Target: Rs 3,200 | Return: 13 percent
The stock is on the verge of completing a corrective pattern. It has displayed a trending movement between the levels of Rs 1,945 to Rs 3,445 during the period March 2022 to September 2022.
The corrective pattern is nearing completion between Rs 2,800 to Rs 2,700 levels. It will be an opportunity for traders and investors to invest in the stock from a medium term perspective. On the upside, it will rally towards the Rs 3,100 to Rs 3,200 levels.
Expert: Vinay Rajani, Senior Technical & Derivative Analyst at HDFC Securities
Mahindra CIE Automotive: Buy | LTP: Rs 326.6 | Stop-Loss: Rs 288 | Targets: Rs 375-410 | Return: 15 percent
The stock price has surpassed crucial resistance of multiple top placed at Rs 310. The stock is on the verge of registering new all-time high above Rs 380.
In last two sessions, the stock surged with significant volumes. Stock has also broken out from last 4 four months of price consolidation.
Primary trend of the stock is bullish with higher tops and higher bottoms, as it has been trading above all important moving averages.
NLC India: Buy | LTP: Rs 88.45 | Stop-Loss: Rs 83 | Targets: Rs 99-107 | Return: 12 percent
The stock price has broken out from the bullish Cup and Handle pattern on the daily chart. Price breakout is accompanied with jump in volumes.
The stock price is placed above all important moving averages. PSU sector has been outperforming for last many months. Indicators and oscillators have turned bullish on daily and weekly charts.
Triveni Engineering: Buy | LTP: Rs 289 | Stop-Loss: Rs 270 | Targets: Rs 330-355 | Return: 14 percent
The stock has seen symmetrical triangle breakout on the daily chart. Price breakout is accompanied with rising volumes. Also there were higher tops and higher bottoms on the daily chart.
The stock price is placed above all important moving averages. Sugar sector has started outperforming after long time. Indicators and oscillators have turned bullish on daily and weekly charts.
Expert: Jigar S Patel, Senior Manager - Equity Research at Anand Rathi
Balrampur Chini Mills: Buy | LTP: Rs 394 | Stop-Loss: Rs 370 | Target: Rs 435 | Return: 10 percent
Since April 2022, the counter observed a free fall from Rs 526 to Rs 331 and it has stabilized near its historical support of Rs 325. From the candlesticks pattern perspective, during the October month, the counter displayed Doji pattern followed by bullish Harami and volume steadily increasing which is a hinting upside.
From the indicator perspective, daily RSI (relative strength index) has made an impulsive structure near the oversold zone, further confirming the counter's upside.
One can buy in a small tranche at current levels and buy another tranche at around Rs 382 levels (if retested again). The upside target is expected till Rs 435 and with a stop-loss of Rs 370.
Punjab National Bank: Buy | LTP: Rs 56.75 | Stop-Loss: Rs 49 | Target: Rs 68 | Return: 20 percent
From June 2022 till date, PNB has given a whopping return of 130 percent. At the current juncture, it is sustaining above its historical resistance of Rs 55 which is adding strength to the counter.
On the indicator front, weekly DMIs (directional movement index) have made a super bullish structure alongside volume is rising with the price which is a very positive indication for further upside in the counter.
One can buy in the range of Rs 55-57. The upside target is expected around Rs 68 and the stop-loss would be Rs 49.
Pfizer: Buy | LTP: Rs 4,439 | Stop-Loss: Rs 4,250 | Target: Rs 4,800 | Return: 8 percent
Since September 2021, the counter observed a free fall from Rs 6,080 to Rs 4,070 and has stabilized near its historical support of Rs Rs 4,100.
From the candlesticks pattern perspective, the November 2022 month counter displayed a Hammer pattern along with volume steadily increasing which is a hinting upside.
From the indicator perspective, the weekly RSI (relative strength index) has made a complex structure near the oversold zone, further confirming the counter's upside.
One can buy in a small tranche at mentioned levels and buy another tranche at around Rs 4,350 levels (if retested again). The upside target is expected till Rs 4,800 and with a stop-loss of Rs 4,250.
Expert: Ruchit Jain, Lead Research at 5paisa.com
Mahindra CIE Automotive: Buy | LTP: Rs 326.6 | Stop-Loss: Rs 302 | Target: Rs 342-357 | Return: 9 percent
The stock has been consolidating within a narrow range since last few weeks and prices have given a breakout from the consolidation phase. This indicates a resumption of its uptrend and hence the stock could continue its upmove in the near term. The volumes have good high in last couple of sessions indicating a buying interest in the stock.
Hence, traders can look to buy the stock in the range of Rs 322-320 for potential targets around Rs 342 and Rs 357. The stop-loss for long positions should be placed below Rs 302.
Can Fin Homes: Sell | LTP: Rs 524.30 | Stop-Loss: Rs 545 | Target: Rs 500-488 | Return: 7 percent
Post the sharp correction in the month of September, the stock witnessed a gradual pullback move in last couple of months. However, if we look at the volumes, the corrections witnessed high volumes while they were lower during upmove.
The prices have given a breakdown from its trendline support and the RSI oscillator also has given a negative crossover. Hence, we expect the stock to underperform in the near term.
Traders can look to sell the December Futures contract around current market price of Rs 524 for potential targets around Rs 500 and Rs 488. The stop-loss for short positions should be placed above Rs 545.
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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