Vinay Rajani recommends selling Vedanta, DLF; expects further fall in Nifty

The technical analyst from HDFC Securities sees the next major support for the Nifty at 15,700-level.

Nifty: Downtrend continues

From the recent swing high of 18,114 registered on April 04, 2022, the Nifty has witnessed a fall of almost 2,000 points. The Nifty has been falling for last four consecutive weeks and this week too it has started on a bearish note. 

The NSE benchmark index is now trading below its 20, 50, 100 and 200 DMA, which indicates that positional trend has turned bearish. On May 10, 2022, the Nifty Smallcap Index plunged 2.4 per ent and breached the crucial support of previous swing low formed in February 2022. 

The support for the Nifty is now seen at 15,700 level, while resistance for the same is seen at 16,450.

Sell

Vedanta May FUT

CMP: Rs 331.90

Target: Rs 314

Stop Loss: Rs 343

The stock has violated its crucial support of the 50-day EMA with rising volume. Metal as a sector too has started underperforming. Indicators and Oscillators are showing weakness on the daily and weekly chart. The stock has stated forming lower tops and lower bottoms on the daily charts.

Sell

DLF May FUT

CMP: Rs 319

Target: Rs 300

Stop Loss: Rs 330

Short build up is seen in DLF on Tuesday as OI has risen by 7 per cent (Prov) with price falling by 3 per cent. The stock price has broken down from the upward sloping trendline on the weekly chart. Indicators and Oscillators like RSI and MFI are showing weakness in the stock. 

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