The market continued its higher highs formation for the 11th straight session and reached a fresh record high above 23,100, but the bears pulled the Nifty 50 down below the 23,000 mark on a closing basis on May 27. The BSE Sensex and Nifty 50 closed moderately lower, forming a bearish candlestick pattern on the daily charts. Meanwhile, the market breadth was negative for another session as approximately 1,420 equity shares declined against 877 shares advancing on the NSE. The index is likely to be rangebound with resistance at 23,100-23,200 and support at 22,800 in the coming sessions, while volatility is expected to be elevated ahead of the Lok Sabha election results. Here are some trading ideas for the near term:
Pravesh Gour, Senior Technical Analyst at Swastika Investmart
Prudent Corporate Advisory Services | CMP: Rs 1,730
Prudent Corporate Advisory has broken out of a long consolidation period on the weekly chart. A breakout from this consolidation suggests a potential shift in market sentiment and an increased likelihood of a sustained move in the price. On the daily chart, the counter has experienced a V-shaped recovery from the last breakout level at Rs 1,500, and starts a new leg of the rally towards Rs 1,800.
The overall structure of the counter is very lucrative, as it is trading above all its important moving averages. The momentum indicator RSI (relative strength index) is also positively poised, whereas MACD (moving average convergence divergence) is supporting the current strength.
On the upside, Rs 1,800 is an important psychological level; above this, we can expect a move towards Rs 1,900+. On the downside, a cluster of moving averages around Rs 1,580 is a strong demand zone during any correction.
Strategy: Buy
Target: Rs 1,944
Stop-Loss: Rs 1,580
Hindustan Petroleum Corporation | CMP: Rs 557
HPCL appears to be emerging from a prolonged consolidation phase, marked by robust trading volumes and a breakout from a triangle pattern. Analysing its daily chart reveals a classical structure. The pattern indicates a primary target of Rs 580, with potential for further gains towards Rs 620.
For downside protection, Rs 510 serves as an immediate support level. The MACD indicator reinforces the current bullish momentum, complemented by a positive positioning of the RSI indicator.
Strategy : Buy
Target: Rs 624
Stop-Loss: Rs 510
Gravita India | CMP: Rs 1,139
Gravita India has witnessed a breakout of a long trendline with strong volume and closed above Rs 1,100 levels. A cluster of moving averages formed a base at Rs 900 levels, making the counter lucrative on a long-term basis.
On the higher side, Rs 1,200 acts as a susceptible level; above this, we can expect a long move towards Rs 1,280+ in the shorter to longer timeframe, while on the lower side, Rs 1,050 serves as an important support during any correction.
Strategy: Buy
Target: Rs 1,284
Stop-Loss: Rs 1,050
Exide Industries | CMP: Rs 494
On the daily chart, Exide has witnessed a breakout of a long consolidation formation with huge volume, while on the weekly chart, it has broken a Flag formation pattern. The counter has a classic structure because it is trading above all of its significant moving averages.
On the upper side, Rs 500 is an immediate resistance; above this, we can expect a big move till Rs 540+ in the shorter time frame, while on the downside, Rs 460 is the demand zone for any correction. The momentum indicator RSI is also positively poised, whereas MACD is supporting the current strength.
Strategy: Buy
Target: Rs 544
Stop-Loss: Rs 460
Jay Thakkar, Vice President & Head of Derivatives and Quant Research
Reliance Industries | CMP: Rs 2,932.5
Reliance Industries seems to have completed a three-wave corrective fall in a downward sloping parallel channel. The stock has taken good support at the lower end of the channel and has started to form higher tops and higher bottoms. The momentum indicator has also reversed and provided a bullish crossover on the daily charts, thus indicating a short-term uptrend and higher probability of an upward breakout from the falling channel.
In the event of an upward breakout, Reliance is likely to inch towards Rs 3,100 levels, whereas on the lower side, Rs 2,870 is now an immediate support. The stock has seen good short covering since mid-April; however, the long additions may come only once there is a strong breakout from the falling channel.
Strategy: Buy
Target: Rs 3,100
Stop-Loss: Rs 2,870
UltraTech Cement | CMP: Rs 10,225.5
UltraTech has provided a breakout from the falling channel and has provided a convincing close above the same. The momentum indicator MACD has also turned bullish and shown positive divergence, which is bullish in the short to medium term. On the upside, the stock is likely to surpass its all-time high levels and inch towards Rs 10,750 to Rs 11,000 levels.
On the lower side, it has strong support at Rs 9,950 levels. The stock has witnessed good short covering from the lower end of the falling channel, and with this breakout, it has seen some long additions as well. Hence, until Rs 9,950 levels are not broken, the overall short to medium-term outlook remains positive on UltraTech Cement.
Strategy: Buy
Target: Rs 10,750, 11,000
Stop-Loss: Rs 9,950
Axis Bank | CMP: Rs 1,187
Axis Bank has once again formed a lifetime high, clearly indicating that the overall trend is bullish. The momentum indicator MACD has again come back into the buy mode, whereas it is already in the buy mode on the weekly chart. The stock is inching towards Rs 1,240/1,280 levels from here on. On the lower side, it has crucial support near Rs 1,140 levels, and till those levels are held, the overall trend remains bullish. After short covering in the April series, the stock has seen good long buildup in the May series.
Strategy: Buy
Target: Rs 1,240, 1,280
Stop-Loss: Rs 1,140
Ashish Kyal, CMT, Founder / CEO of Waves Strategy Advisors
JBM Auto | CMP: Rs 2,117
JBM Auto has been moving higher and is intact in a strong uptrend. In the previous session, it closed with a massive gain of 7.67 percent. On the daily chart, in the previous session, prices formed a bullish candle. The price was moving in a rectangular range over the last few days, indicating accumulation in the stock. It has now closed above this trading range, resulting in a bullish breakout of the rectangular pattern.
KST (know sure thing) has turned above the signal line and is also trading above the zero line, which is a positive sign. We can expect good momentum to continue in this stock. Support is placed at Rs 2,000.
In short, the trend for this stock is positive. Use dips towards Rs 2,080-2,100 as a buying opportunity for a move towards Rs 2,370-2,400 levels as long as Rs 2,000 holds on the downside.
Strategy: Buy
Target: Rs 2,370, 2,400
Stop-Loss: Rs 2,000
Automotive Stampings and Assemblies | CMP: Rs 896.55
Automotive Stampings formed a large bullish candle in the previous session with a surge in volume. It closed the previous session on a positive note with a huge gain of 9.60 percent. On the chart, we can see that the prices have been consolidating between a range of Rs 802-920. Resistance as per this is near Rs 920 levels.
Additionally, prices closed near the upper band of the Bollinger Bands. A sustainable close above the upper band will resume an uptrend. In short, the trend is positive. Any break above Rs 920 can lift prices higher towards Rs 1,030. On the downside, support is placed at Rs 865 levels.
Strategy: Buy
Target: Rs 1,030
Stop-Loss: Rs 865
Paras Defence and Space Technologies | CMP: Rs 894.7
Paras Defence has been moving higher recently and is intact in a strong uptrend. In the previous session, it closed with a gain of 4.14 percent. On the daily chart, prices formed a bullish candle in the previous session. Recently, prices have broken out of the consolidation range with huge volumes. We have shown the ADX (average directional index) indicator, which gives an indication if the stock is trending or in a trading range. The ADX of this stock is 25.18, indicating a trending market. Closest support is placed at Rs 840.
In short, the trend for this stock is positive. Use dips towards Rs 880 as a buying opportunity for a move towards Rs 980 levels as long as Rs 840 holds on the downside.
Strategy: Buy
Target: Rs 980
Stop-Loss: Rs 840
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.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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