The benchmark indices gained strength for the first time in the last six consecutive sessions on October 28, although they still traded below the 20-, 50-, and 100-day moving averages. The breadth was also positive, with about 1,730 shares advancing against 817 declining shares on the NSE. The Nifty 50 needs to climb above these moving averages for a sustainable uptrend; until then, the trend may remain in favour of the bears. Below are some trading ideas for the near term:
Mehul Kothari, DVP – Technical Research at Anand Rathi
LIC Housing Finance | CMP: Rs 618.5
Recently, LIC Housing Finance has shown a bullish divergence on the daily chart around the Rs 580-600 support zone, suggesting a potential upward reversal. This support zone aligns with the R3 level on the yearly Camarilla pivot, which previously acted as resistance but has now transitioned into a support level, enhancing its attractiveness for a bullish trade setup. Additionally, the price action has broken above a bearish trendline, indicating a shift in trend, as seen on the chart. Given these technical signals, a long position is advised in the Rs 610-620 range, with an upside target of Rs 665. For risk management, a stop-loss is recommended near Rs 590 on a daily close basis to safeguard against downside risk.
Strategy: Buy
Target: Rs 665
Stop-Loss: Rs 590
Fine Organics Industries | CMP: Rs 4,683.65
Like other midcap stocks, Fine Organics has undergone a heavy correction in the past few weeks and is now in an oversold zone. The stock has retraced almost 78.6 percent of its previous move. As of now, it has found support at the flat line of the Ichimoku system. Going ahead, a move above Rs 4,750 might result in a short-term pullback in the stock. Thus, traders are advised to buy the stock only above Rs 4,750 for an upside target of Rs 4,950.
Strategy: Buy
Target: Rs 4,950
Stop-Loss: Rs 4,650
DCX Systems | CMP: Rs 306
DCX Systems has corrected over 35 percent from the peak of Rs 450 during this fall. The stock has retraced 78.6 percent of the previous rally and has also found support at the rising trendline. This support coincides with the support formed by the Ichimoku system. We expect a decent bounce in the coming session. Thus, we advise traders to go long in the stock near Rs 300 for an upside target of Rs 285.
Strategy: Buy
Target: Rs 330
Stop-Loss: Rs 285
Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities
Asian Paints | CMP: Rs 3,001.85
Asian Paints has formed a falling wedge pattern, which is a bullish reversal pattern. The momentum indicator MACD (Moving Average Convergence Divergence) has provided a positive divergence on the hourly charts and is on the cusp of reversing on the daily charts as well, from sell to buy. This indicates a higher chance of a bounce back from a short-term perspective. Additionally, the decline in international crude prices should support this stock’s bounce back from current levels. The stock has seen significant Call unwinding at the Rs 3,000 strike, and the next highest Call base is at Rs 3,100, suggesting a higher likelihood of short covering from the current levels.
Strategy: Buy
Target: Rs 3,060, Rs 3,100
Stop-Loss: Rs 2,950
Tata Motors | CMP: Rs 878.5
Tata Motors has taken support at its previous swing low formed on the general election results day. The momentum indicator MACD has provided a bullish crossover on its hourly charts and has been moving up with a positive divergence. The daily MACD is also in the oversold territory, enhancing the probability of an upside. There has been significant Call writing at higher levels, ranging from Rs 900 to Rs 1,000; however, short covering is expected until the monthly expiry, as the stock has not seen any major short buildup in the futures segment since October 18.
Strategy: Buy
Target: Rs 895, Rs 910
Stop-Loss: Rs 855
Tata Consultancy Services | CMP: Rs 4,090.85
TCS has underperformed its benchmark index Nifty IT during this results season; however, it now seems that the stock is ready for a bounce back. The hourly MACD is showing positive divergence, and the daily MACD is on the verge of providing a bullish reversal. The stock has also provided a short-term falling trendline breakout after forming a Doji candlestick pattern on the lower side, indicating a possible halt in the previous downtrend and a likely reversal due to short covering.
Strategy: Buy
Target: Rs 4,170, Rs 4,200
Stop-Loss: Rs 4,020
Santosh Meena, Head of Research at Swastika Investmart
Firstsource Solutions | CMP: Rs 372.55
Firstsource Solutions is displaying strong bullish momentum, having resumed its upward trend after breaking out of a rectangle formation. This breakout was accompanied by significant volume and positive earnings, underscoring the bullish sentiment. Currently, the price is comfortably positioned above key moving averages, with momentum indicators also reflecting a positive bias. Going forward, the breakout level around Rs 340 will serve as a support level on any pullback, reinforcing the overall bullish structure.
Strategy: Buy
Target: Rs 440
Stop-Loss: Rs 340
PVR INOX | CMP: Rs 1,530.5
PVR INOX is rebounding from its 200-DMA (Daily Moving Average), which aligns with the 50 percent retracement level of the previous swing rally. It has also managed to close above its 100-DMA, indicating a strengthening trend. However, the 20-DMA near Rs 1,600 will act as immediate resistance, with Rs 1,660 as the next target. Momentum indicators, particularly the RSI (Relative Strength Index), are showing a positive crossover from the oversold zone, suggesting renewed buying interest and potential for further upside.
Strategy: Buy
Target: Rs 1,660
Stop-Loss: Rs 1,440
Indigo Paints | CMP: Rs 1,643
Indigo Paints is poised to break through a multi-month resistance around the Rs 1,700 mark, signaling the potential for a sharp rally toward the Rs 2,000 level. During its recent pullback, it found support at the 20-DMA and formed a bullish Marubozu candlestick, reinforcing the strength of the current uptrend. Momentum indicators align with this bullish bias, suggesting further upside potential in the coming sessions.
Strategy: Buy
Target: Rs 2,000
Stop-Loss: Rs 1,500
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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