The Nifty breached and closed below 200 DEMA that acted as support for two consecutive sessions in a row. Daily RSI registered fresh 14 periods low along with a continuation of downside momentum suggests downtrend might continue unless prices surpass above its 100 DEMA currently placed at 11,537. The 11,300 put writers were unable to defend the level paving way for 11,100 swing low. Breach and close below 200 DEMA levels will lead to an extended drop towards its major swing low placed around 11,100 levels. As most of the indicators are nearing the oversold state and with the next meaningful support zone placed around 11,100, it’s prudent to partially book profits from existing shorts and wait for reversal formations or exhaustion of current downtrend to deploy any fresh positions.
Reco : BUY
CMP : Rs 1230
The stock reversed sharply post “double bottom” formation on the hourly scale. Volume spurt along with positive price action post prevalent “Bullish Divergence” indicates commencement of fresh upmove. Sustenance of support trendline post multiple test in previous trading sessions followed by spurt in volumes with positive price action augurs well for a momentum to continue on the upside. The stock can be bought with stop placed below previous session's low, 1,182, for retest of downward resistance line placed around 1,290 level in coming sessions.
CMP: Rs 446.60
The stock breached and closed below 456 “double bottom” support levels along with an occurrence of large bearish candle. Inability of the Daily RSI to surpass above its signal line followed by negative price action along with higher volumes indicates the down move could accelerate on the downside. Stock can be sold with stop placed above “double bottom” support of 456 for 427 price confluence support to be obtained in coming sessions.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.