Nifty outlook and two trading ideas by Sacchitanand Uttekar, AVP – Technical (Equity) at Tradebulls Securities:
On Tuesday, the index witnessed its biggest decline since September 27, 2017. It also violated the trendline joining the lows of September 27, 2017 to October 23, 2017. We abide by our stance that positional longs should be booked as the decline could get amplified in the coming days. Wednesday’s decline has fulfilled our swing setup parameters as the Nifty ended the day below its previous 4 bar low of 10,383. Hence 'SELL on Rally' strategy could now be considered with a stop above 10,595 with an expectation of a move towards 10,000.
CMP: Rs 152.30
Stop Loss: Rs 155.80
Target: Rs 145
Occurrence of an Engulfing Bearish formation coupled with a divergence on the daily RSI indicates further weakness to be witnessed. Short positions could be established for a trading move towards Rs 145 with a stop above Rs 155.80.
CMP: Rs 3200
Stop Loss: Rs 3241.30
On the daily scale the stock price has breached below the ‘Rising Wedge’ formation. The pattern indicates a move towards Rs 3,052. We believe that a breach below 3,160 could amplify the decline towards the pattern target upto 3,052. Hence, pullbacks if any should be utilized to create fresh shorts with a trading stop at Rs 3241.30.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.