Trend to remain bearish as long as Nifty stays below 17,275, Vinay Rajani

The technical analyst from HDFC Securities has buy call on ICICI Prudential Gold ETF and sell call on Mothersonsumi.

Nifty: Bearish Trend Gets the Momentum

From the recent high of 18,115, registered on April 04, 2022, the Nifty has witnessed a fall of 1,300-odd points towards 16,824. The Nifty has given a close slightly above its 200-day EMA, placed at 16,840. At, 16,893, the Nifty has retraced more than 50 per cent of the entire upswing seen from 15,671 to 18,115. 

The next support for the Nifty is seen at 16,604, which happens to be the 61.8 per cent retracement of the move. Resistance for Nifty has shifted down to 17,275 and unless Nifty closes above that, the view remains bearish.

BUY

ICICI Prudential Gold ETF

Target: Rs 50

Stop Loss: Rs 45

Last Close: Rs 47

MCX Gold has given a fresh breakout from the downward sloping trend line on the medium term charts. In the current market scenario, Gold as an asset class is expected to outperform equity benchmark index. Moving average and oscillators setup is bullish on the short to medium term chart and therefore Gold can be bought as ETF. 

SELL

Motherson Sumi

Target: Rs 125

Stop Loss: Rs 140

Last Close: Rs 134

The stock has given a fresh sell signal from “Flag” pattern on the weekly charts. The bearish breakout is accompanied with rising volumes. The stock has also breached important moving average supports and oscillators have turned bearish on the short term charts. 

(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC securities. Views expressed are personal).