By Dinesh Rohira
The Indian equity market witnessed a major free fall towards the weekend session, erasing earlier peak, on the backdrop of geopolitical concerns and China’s downgrade on sovereign debt. This coupled with selloff from foreign investors also triggered the fall.
The 2 percent fall in metal and PSU banking indices further took the Nifty to trade below its psychological level and, closed the session at 9,964 with 157 points down on Friday.
The breach from its 20-days EMA formed a long bearish candlestick pattern on its daily price chart coupled with the bearish engulfing pattern on its weekly price chart, indicating a further consolidation in short-term, vindicating the earlier rally without fundamental support.
The momentum indicator suggests a bearish sentiment among market participants with RSI at 47 slipping below its threshold.
With Nifty slipping below its 20-days EMA, the range for the week is expected to be at 10,137 on upside and 9,850 on the downside.
Given the uncertainty revolving around the domestic market on the backdrop of stimulus package coupled with geopolitical tension, the market is expected to remain under pressure.
Here is a list of top four stocks which can give up to 10% return in the short term:
Genesys International Corporation: BUY| Target Rs. 328 | Stop-loss Rs 280| Return 10%
Genesys International remained in a strong uptrend movement forming a series of rising peaks on the long-term charts. The consolidation phase witnessed during the past month ended the bearish trend, forming a bullish candlestick pattern which suggests a continued uptrend.
On the technical front, the RSI stood at 69 as the price just started to trade above its resistance level signaling a buying sentiment.
The MACD at 11.1 also suggests strong support for the rally as it crossover its signal-line. The stock will face resistance at 335-level and support level at 278.
We have a BUY recommendation for Genesys International which is currently trading at Rs. 298.55
Future Retail : SELL| Target Rs. 517 | Stop-loss Rs563 |Return 5%
The stock came under pressure after clocking near 52-week high but failed to sustain that level on the backdrop profit booking. The stock witnessed a major selloff, breaching its 50-days EMA to consolidate near lower-top placed at Rs536.3.
On the technical front, the stock is in weakly positioned indicating a further downward trend. The RSI of stock suggests a weak momentum support at 59 with mounting selling pressure, which may extend if it fails to triggers any positive regime.
Similarly, on the daily price chart, it formed a bearish candlestick pattern indicating a further consolidation at its lower bottom placed at 521.35. On the basis of EMA stock will be facing a resistance from its 52-week high placed at 568 and crucial support at 534.
We have a SELL recommendation for Future Retail which is currently trading at Rs. 543.45
Tata Steel: SELL | Target Rs624 | Stop Loss Rs665 |Return 5%
Tata Steel witnessed a strong uptrend in past trading session without major consolidation and rallied around its peak-high placed at 696.
However, it lost a momentum in the last session on the backdrop of poor volume support. The stock closed at a lower level on closing basis indicating a weak session ahead.
On the weekly price chart, the stock formed bearish candlestick pattern indicating a further consolidation. The bearish crossover of MACD coupled with price trading below its 20-days EMA suggest a bearish outlook for Tata Steel in short-term.
It is facing resistance from 20-days EMA at 669-level and, its crucial support level at 630. We have a SELL recommendation for Tata Steel which is currently trading at Rs. 654
Wipro: BUY| Target Rs307 | Stop-loss Rs275 | Return 4%
Wipro retraced from its crucial support level after consolidating at a lower level for a couple of trading sessions. With this uptrend momentum build on the backdrop of volume breakout, the stock started to trade at the bullish trajectory.
On the daily chart, the stock formed a bullish reversal pattern which indicates an end of the downward movement. On the technical front, the RSI of stock suggests a buying momentum with the price being traded above its resistance level.
Further on the basis of EMA, the stock is currently started trading above its 20-days EMA. The stock is will face a resistance at 313-level and support level at 273
We have a BUY recommendation for Wipro which is currently trading at Rs. 294.45.
Disclaimer: The author is Founder & CEO, 5nance.com. The views and investment tips expressed by investment experts on Moneycontrol are his own and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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