On the higher side, call writing at 11,700-11,800 will act as stiff resistance zone for the index and a close above 11,800 will only negate bearish view on indices.
The mounting concern of falling Indian Rupee (INR) against the US Dollar along with the rising bond yields put tremendous pressure on Indices. As a result, Nifty nosedived sharply this week and slipped below 11,400-mark in Wednesday’s session.
Subsequently, Nifty saw a decent pullback and managed to reclaim 11,500-mark on Thursday.
Looking at the daily line chart, the index broke the previous swing high of 11,470 in Wednesday’s session but on a closing basis, it managed to rebound and hold 11,470 which led to decent pullback on Thursday.
Now, the recent swing low of 11,393 will act as an immediate support and a break below 11,393 will pull index lower towards 11,340 – 11,235 levels respectively which is a crucial support zone.
Whereas, on the higher side, 11600 – 11650 will act as a strong resistance in coming trading session. However, in the short-term market outlook remains weak and any pullback move towards 11600-11650 can be used to initiate fresh short positions with immediate targets of 11400 and below that Nifty can correct by another 150-200 points.
On the higher side, call writing at 11700-11800 will act as stiff resistance zone for the index and a close above 11,800 will only negate bearish view on indices.
Here is a list of top three stocks which could give 6-14% return in the next 15-21 sessions:
Tata Motors Ltd: Buy around Rs 270| LTP: Rs 269| Target: Rs 305| Stop Loss: Rs 254| Return 14%
Looking at the daily chart, the stock has formed a strong base near 250 levels and is trading in a narrow range. As a result, it has formed an inverse head & shoulder pattern on the daily chart.
The said pattern will be activated if Tata Motors starts sustaining above 275. The daily Bollinger band has contracted significantly and indicates the period of low volatility.
Considering the above technical evidence, we recommend traders to buy this stock at the current level of 270 with a price target of 305. A Stop loss should be placed at 254 on a closing basis.
Dr Reddy's Laboratories Ltd: Buy around Rs 2580 - 2530| LTP: Rs 2567| Target: Rs 2760| Stop Loss: Rs 2460| Return 7%
On the weekly chart, Dr. Reddy’s has formed a ‘Descending Triangle’ pattern and off late stock breached the upper band of the triangle pattern. The break out of the said pattern was supported by the weekly RSI (14) which entered well inside the 60 levels.
The weekly 9-45 EMA on price has signaled positive crossover which supports our hypothesis. Hence, we advocate traders to buy Dr. Reddy in a range of Rs 2,580 to Rs 2,530 with an upside price target of Rs 2,760. A stop loss should be placed at Rs 2,460.
Jubilant FoodWorks Ltd: Sell Around 1435 - 1450| LTP: Rs 1417| Target: Rs 1330| Stop Loss: Rs 1495| Time frame 15 to 21 trading session| Return 6%
Jubilant FoodWorks has been in a strong uptrend since several months and in that optimism, the stock hit a record high of 1578. Subsequently, it saw profit booking and stock slide below 1400.
Due to the sharp profit booking, the stock broke the upward sloping pattern drawn on the daily chart. Subsequently, stock saw pullback during Thursday’s trading session but the up move got resist near 1450 – 1460 which was a breakdown point of channel pattern.
On the weekly chart, we are seeing complex bearish divergence. Combining the above technical parameters we recommend traders to build a short position in a range of Rs 1435 to Rs 1450 with a price target of Rs 1330. A stop loss should be placed at Rs 1495.
Disclaimer: The author Head of Technical Research, Way2Wealth Brokers Pvt. Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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