Technical calls from HDFC Securities: Sell MCX, Repco Home Finance

Nifty outlook and top trading ideas by Vinay Rajani - Technical Analyst, HDFC Securities.

Trend likely to remain bearish unless Nifty closes above 10,900

Nifty has been falling for last eight straight sessions. It has reached near its previous bottom support level of 10,583. Any level below 10,583 would result in a breakdown from last eight week’s price consolidation. The index has been sustaining below its 20, 50, 100 and 200-day moving average (DMA) levels, indicating bearish trend. 200-DMA is placed at 10,860, which is likely to act as a strong resistance.

SELL MCX (Rs 665) 

Target: Rs 620  

Stop loss: Rs 690 

The stock saw a breakdown on the daily chart on Tuesday by closing below the support level of Rs 660 odd levels. It closed at five-year low, lowest level since June 2014. Primary trend of the stock is bearish where the price has been trading below its 5, 20 and 200-day simple moving average (SMA). Momentum indicators and Oscillators like relative strength index (RSI) and moving average convergence and divergence (MACD) are showing weakness on daily charts. Therefore, we recommend selling MCX at the closing market price (CMP) of Rs 665 for the target of Rs 620, keeping stop loss at Rs 690.

SELL REPCO HOME FINANCE (Rs 314)

Target: Rs 328

Stop loss: Rs 295

The stock has broken down below the downward sloping trend line, adjoining the low of October 19 and December 11. The price is trading below its 5, 20 and 200 day-SMA, indicating a bearish trend for the short to medium term.  Oscillators and Momentum indicators turned bearish on the daily and weekly charts. Therefore, we recommend selling Repco Home Finance for the target of Rs 295, keeping stop loss at Rs 328. 

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Disclaimer: The analyst may have positions in any or all the stocks mentioned above.