Bulls could not maintain control over the market on October 21, as bears pulled the benchmark Nifty 50 down by 73 points to 24,781 after a day of rallying. About 1,968 shares declined, while only 579 shares advanced on the NSE, with a sharp correction in broader markets. The market is expected to remain range-bound with an overall negative bias until it decisively moves back above all key moving averages. Below are some trading ideas for the near term:
Pravesh Gour, Senior Technical Analyst at Swastika Investmart
Mazagon Dock Shipbuilders | CMP: Rs 4,666.5
Mazagon Dock has experienced a breakout of a bullish Inverse Head and Shoulders pattern on the daily chart. This pattern is considered a bullish reversal signal. The breakout occurred with strong volume, which often confirms the pattern's validity. High volume during a breakout indicates increased market participation and interest in the stock, further supporting the bullish outlook.
Moving averages are widely followed technical indicators used to identify trends and potential support/resistance levels. Trading above these moving averages is a positive sign, suggesting that the stock's price is in an uptrend supported by buying pressure. On the upside, Rs 4,900 is an immediate resistance area; above this, we can expect a run-up toward Rs 5,000+ levels in the near term. On the downside, Rs 4,400 serves as major support for any correction.
Strategy: Buy
Target: Rs 5,040
Stop-Loss: Rs 4,400
Multi Commodity Exchange of India | CMP: Rs 6,629
MCX India is exhibiting bullish momentum and forming a Bullish Flag pattern, indicating further upside potential. The previous swing high around Rs 6,680 is an immediate level; above this, we can anticipate reaching the Rs 7,000 level in the near term. On the downside, the previous breakout level of Rs 6,250 is an immediate support level, while Rs 6,000 is a strong demand zone. Momentum indicators are positively poised, supporting the current strength of the trend.
Strategy: Buy
Target: Rs 7,080
Stop-Loss: Rs 6,250
Godawari Power & Ispat | CMP: Rs 193.6
Godawari Power is bottoming out from lower levels and has found a strong base at the Rs 181 level on the daily chart, accompanied by decent volume. On the higher side, Rs 200 acts as a susceptible level; above this, we can expect a significant move toward Rs 210+ in the shorter timeframe, while on the lower side, Rs 177 serves as important support during any correction.
Strategy: Buy
Target: Rs 214
Stop-Loss: Rs 177
Riyank Arora, Research Analyst at Mehta Equities
Bajaj Auto | CMP: Rs 10,501
Bajaj Auto has touched its key support level of Rs 10,000 and formed a strong bullish candle. With the RSI (Relative Strength Index 14) around 36, indicating oversold conditions, it presents a favourable risk-to-reward opportunity for buyers at current levels. A strict stop-loss at Rs 10,200 is recommended, with the potential for the stock to move toward targets of Rs 11,400 and beyond. Additionally, volumes are nearly three times the average of the last 10 days, suggesting strong momentum.
Strategy: Buy
Target: Rs 11,400
Stop-Loss: Rs 10,200
Mahindra and Mahindra | CMP: Rs 2,998
Mahindra and Mahindra has reached its critical support level and formed a bullish candle. With the RSI (14) around 48 and showing a positive uptick from lower levels, it signals an increase in momentum. A strict stop-loss at Rs 2,940 offers a solid risk management setup, while the stock targets Rs 3,080. Volumes are approximately double the average of the last 10 days, highlighting good momentum potential.
Strategy: Buy
Target: Rs 3,080
Stop-Loss: Rs 2,940
HDFC Bank | CMP: Rs 1,728.7
HDFC Bank has hit its important support level and displayed a strong bullish candle. With the RSI (14) at 59, indicating continued momentum, the stock offers a good buying opportunity. A strict stop-loss should be set at Rs 1,700 to manage risk well, while the potential target is set at Rs 1,775. Volumes are nearly twice the 10-day average, further suggesting strong upward momentum.
Strategy: Buy
Target: Rs 1,775
Stop-Loss: Rs 1,700
Hero MotoCorp | CMP: Rs 5,242
Hero MotoCorp has touched its significant support level and created a bullish candle. With the RSI (14) around 32, indicating oversold conditions, it presents a good buying opportunity for risk-reward seekers. A strict stop-loss at Rs 5,085 helps manage risk, with the stock potentially reaching targets of Rs 5,500. Volumes are nearly triple the 10-day average, making this stock a strong momentum candidate.
Strategy: Buy
Target: Rs 5,500
Stop-Loss: Rs 5,085
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
State Bank of India | CMP: Rs 814
State Bank of India has provided a breakout from a falling trendline and multiple swing resistance, accompanied by a bullish crossover in its MACD (Moving Average Convergence Divergence) on the daily chart, which is quite positive for the stock in the near term. The stock has been an underperformer compared to its peers recently and is likely to catch up with the up move to align with the Bank Nifty. The stock has witnessed Put unwinding from Rs 790 to Rs 820 strikes, which is a negative sign; however, on the Call front, the Rs 820 strike has the highest open interest. If this is taken off, it could lead to a further short covering rally on the upside.
Strategy: Buy
Target: Rs 832, Rs 841
Stop-Loss: Rs 808
Cummins India Futures | CMP: Rs 3,582.9
Cummins has been trading with a negative divergence, as its MACD momentum indicator has entered sell mode for the third time now, this time falling below the zero-reference line, indicating further weakening of momentum. The stock has been consolidating within a range for some time, and the formation of lower tops and lower bottoms suggests that the range is likely to break on the downside.
From the derivatives front, the stock has seen the highest open interest at the Rs 3,500 strike Put, making this an immediate support level. If this level is broken, we could see increased selling pressure. The stock is currently trading well below its maximum pain and modified maximum pain levels of Rs 3,700 and Rs 3,743.
Strategy: Sell
Target: Rs 3,370, Rs 3,240
Stop-Loss: Rs 3,700
GAIL India Futures | CMP: Rs 218.57
GAIL has clearly broken its bearish parallel channel on the lower side, with a clear sell signal in its MACD on both the daily and weekly charts. There has been a notable negative divergence in the MACD momentum indicator on these charts, indicating a higher probability of downside. From the derivatives perspective, the stock has witnessed heavy Call writing at higher levels from Rs 230 to Rs 250 strikes, indicating clear supply at these levels. Simultaneously, Put unwinding has occurred on the lower side, from Rs 220 to Rs 210 strikes, further confirming that the trend has shifted from up to down.
Strategy: Sell
Target: Rs 210, Rs 200
Stop-Loss: Rs 228
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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