Nifty outlook and top trading ideas by HDFC Securities

Nifty View: In last 7 sessions, Nifty has seen a total fall of 900 odd points, which 8% from the all-time high of 11,171 to 10,276. Technical setup for all global markets turned bearish in the last 7 sessions. Bearish momentum has gone up significantly with volatility Index, VIX reaching almost at 1 year high. Mid-cap and Small-cap indices have already seen a plunge of 14% and 19% respectively from their 1 month high. There are many large-cap stocks which have seen a healthy correction of more than 30% from the 3 month’s highs. So, at these levels, we should not rule out the possibility of the bounce back in few oversold stocks. Nifty has got strong support of its 200 DMA, which is currently placed at 10,000 odd levels, while resistance is placed at 10,700.

Buy NMDC

CMP: Rs 127.8

SL: Rs 121
Target: Rs 138

The stock price has witnessed a fall of 24% from its 1 month High. The stock looks oversold on the short term charts. NMDC stock closed around strong support of its 200 DMA. Primary trend of the stock has been bullish with higher tops and higher bottoms on the monthly charts. Considering the technical evidence discussed above, we recommend buying the stock between Rs 128 and Rs 124, for the target of Rs 138, keeping a stop loss at Rs 121 on the closing basis.  

Buy FederalBank

CMP: Rs 93
SL: Rs 87

Target: Rs 103

The stock price of FederalBank has witnessed a fall of 32% from its 6 month’s high. The stock looks oversold on the short term charts. The stock price has reached the crucial support of its previous top on the weekly charts. The stock price of FederalBank has also tested the neckline support of bullish inverse head and shoulder on the monthly charts, indicating probable bounce back. Primary trend of the stock has been bullish with higher tops and higher bottoms on the monthly charts. Considering the technical evidence discussed above, we recommend buying the stock between Rs 93 and Rs 89, for the target of Rs 103, keeping a stop loss at Rs 87 on the closing basis.