Few trading ideas by Sameet Chavan, Chief Analyst- Technical & Derivatives, Angel Broking:
Short-term tide turned lower
Last Friday was probably a beginning of some pain in the market and this is what we witnessed in three subsequent sessions. The relentless fall kept on breaking hopes for the bulls as most of the intermediate supports got violated in this course of action. Now, there is last ray of hope for the short-term buyers as recent swing low of 9,685.55 remains intact.
We started anticipating such kind of development couple of months back; but, strong momentum kept pushing market higher and posted new record high of 10178.95. But, stubbornly, we continued with our cautious stance and avoided participating in the index in the recent rally towards record highs. This week’s correction justifies our stance to a certain extent. Now, the bigger question would be whether the short term correction is over or still there is some pain left in the market. According to us, this time it would be very difficult for our markets
to maintain this optimism in the near term. Yes, larger degree Bull Run is certainly not over; but, market needed some kind of breather and we are most probably would experience it in weeks to come.
Technically speaking, the weekly chart looks distorted and the way ‘RSI-Smoothened’ is shaped up, is not an encouraging sign for our market. This week, somehow bulls managed to defend 9685; but, going ahead, we do not expect the same kind of strength to be infused in the market. You would have in between rebounds; but, one needs to understand that the short term tide has turned and any relief rally in coming days is likely to get sold into. Going ahead, 9854 – 9921 would be seen as a sturdy wall for the index. On the flipside, we may see index sliding below 9685 to test lower levels of 9640 – 9560 in days to come. Traders are advised to stay light and not to get carried away by such bounce backs.
Last Close: Rs 186.60
After a long consolidation, the stock managed to show some strength after breaking above the daily ’89 EMA’ level of 180 convincingly. The volume activity indicates massive buying interest among market participants, which is an encouraging sign for the stock. Importantly, during the recent corrective move in the index, the stock stood firm and maintained its positive territory. Hence, we recommend buying this stock at current levels for a target of Rs 200 over the next 14-21 sessions. The stop loss now should be fixed at Rs 179.
Last Close: Rs 689.95
This stock has given a massive price appreciation from June month low and now since last 5 – 6 days has been experiencing some profit booking, which we believe was quite evident. The daily chart looks negatively poised as the key short term moving averages confirmed a bearish crossover last week and going ahead would be seen as a sturdy wall for the stock. One can sell this stock for a target of Rs 642 over the next 5-10 sessions. The stop loss should be fixed at Rs 706.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.