The benchmark indices fell nearly one percent on October 8, continuing their downtrend for the sixth consecutive session, with a negative market breadth. About 2,303 shares declined, compared to 270 shares that advanced on the NSE. The market is likely to extend its southward journey if it fails to hold the previous day's low. Until then, consolidation can't be ruled out. Below are some trading ideas for the near term:
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
Vedanta | CMP: Rs 500
Technically, Vedanta has provided a breakout from a symmetrical triangular pattern with a bullish crossover in both its short-term and medium-term momentum indicators. The stock has also witnessed long buildup over the last few weeks; however, in recent days, there has been some long unwinding due to the overall market sell-off. Despite this, the risk-to-reward ratio remains favourable for the long side, making it a good buying opportunity on dips.
Strategy: Buy
Target: Rs 520, Rs 530
Stop-Loss: Rs 485
Sun TV Network | CMP: Rs 795
Sun TV Network has seen a breakdown from a pennant formation, with a sell crossover in both its short-term and medium-term charts, accompanied by negative divergence. The stock faces resistance near the Rs 825 level, which is the breakdown point. The next swing supports are at Rs 780 and Rs 765, which are short-term targets. The stock has also seen short buildup, which is negative from a derivatives perspective. Hence, one can sell Sun TV on a rise near Rs 805.
Strategy: Sell
Target: Rs 780, Rs 765
Stop-Loss: Rs 825
HDFC Asset Management Company | CMP: Rs 4,133
HDFC AMC has broken its crucial uptrend line support with a sell crossover in both its short-term and medium-term charts. The medium-term indicators have turned bearish with a negative divergence. The stock seems to have completed its medium-term uptrend and has seen significant long unwinding. Therefore, it is recommended to sell on a rise near Rs 4,140 for a better risk-to-reward ratio.
Strategy: Sell
Target: Rs 3,970, Rs 3,900
Stop-Loss: Rs 4,210
Pravesh Gour, Senior Technical Analyst at Swastika Investmart
RR Kabel | CMP: Rs 1,772
On a longer timeframe, RR Kabel has witnessed a breakout from a long consolidation pattern with strong volume and closed above Rs 1,760. On the daily chart, it has formed a strong base, and the uptrend remains intact. A new leg of the rally towards Rs 1,800 is expected. The overall structure is very attractive, as the stock is trading above its key moving averages. On the upside, Rs 1,800 is the immediate resistance; above this, a move towards Rs 1,900 can be expected in the near term. On the downside, Rs 1,670 is a crucial support level in case of any correction. The momentum indicators, including the RSI and MACD, are positively poised, supporting the current strength.
Strategy: Buy
Target: Rs 1,914
Stop-Loss: Rs 1,670
Infosys | CMP: Rs 1,934
Infosys is gaining momentum after forming a strong base at the 50-DMA (Daily Moving Average). On the weekly chart, a Flag formation is visible, but a breakout is awaited above Rs 1,975. The 50-DMA at Rs 1,875 is a crucial support level. On the upside, Rs 1,975 is the immediate resistance; a breakout above this may trigger bullish momentum towards the Rs 2,000+ level. The stock is trading above all important moving averages, with a positive bias in momentum indicators.
Strategy: Buy
Target: Rs 2,030
Stop-Loss: Rs 1,870
eMudhra | CMP: Rs 882
eMudhra has been consolidating in the range of Rs 820 to Rs 900 for the past 18 trading sessions. A cluster of moving averages has formed a strong base at Rs 820, making the stock attractive on a long-term basis. On the higher side, Rs 900 is a key resistance; a breakout above this level could trigger a move towards Rs 950+ in the shorter to longer timeframe. On the downside, Rs 820 serves as an important support during any correction.
Strategy: Buy
Target: Rs 952
Stop-Loss: Rs 820
Mehul Kothari, DVP – Technical Research at Anand Rathi
Reliance Industries | CMP: Rs 2,741.5
Reliance Industries has been falling consistently over the past 5-6 trading sessions, from the Rs 3,100 zone towards Rs 2,700. On the intraday charts, the stock appears oversold. The stock is also hovering near the 100% extension of the previous move, suggesting the possibility of a bounce in the coming sessions. Traders are advised to buy the stock only above Rs 2,750, with a target of Rs 2,830.
Strategy: Buy
Target: Rs 2,830
Stop-Loss: Rs 2,710
HDFC Bank | CMP: Rs 1,617.8
HDFC Bank has been falling consistently over the past 5-6 trading sessions, from the Rs 1,800 zone towards Rs 1,600. The intraday charts indicate that the stock is oversold and is hovering near its previous consolidation zone (Rs 1,640 – Rs 1,600), which presents a favourable risk-to-reward scenario for a long trade. Traders are advised to buy the stock only above Rs 1,630, targeting Rs 1,690.
Strategy: Buy
Target: Rs 1,690
Stop-Loss: Rs 1,600
Triveni Engineering and Industries | CMP: Rs 434.8
A few sessions ago, the entire market was excited about sugar stocks, but due to the ongoing pessimism, even sugar stocks have taken a hit. Triveni has corrected from the Rs 510 zone and retraced significantly as per its previous move. The stock is hovering near Ichimoku support on the daily chart. Traders are advised to go long in the stock above Rs 440, targeting Rs 475.
Strategy: Buy
Target: Rs 475
Stop-Loss: Rs 425
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