The Nifty after making a swing high at 10,985 levels witnessed a sharp fall towards 10,738 levels and closed with a weekly loss of 0.48 percent. The massive fall seen on Friday pushed the index below its 5-days exponential moving average (EMA), 13-EMA, 100-EMA, and 200-DMA.
The index erased all the gains on the last trading day to close at 10,754 levels due to the sell-off in global markets after the US Federal Reserve raised interest rates and signaled more rate hikes in 2019.
On the derivatives front, open interest data suggests that the index may likely to trade in the range of 10,500 to 11,000 levels during the week as the index witnessed highest OI addition at these levels, suggest experts.
We may notice lackluster volumes during the week as most of the global markets will remain closed on account of public holidays. Hence, experts advise investors to stay light and focus on stock-specific opportunities.
India VIX, which was cooling down in the last few sessions, witnessed a sharp recovery on the last session by 11.58 percent and on weekly basis, it is up by 5.47 percent at 16 levels. VIX has to hold below 16 zones to get a bullish momentum else tough fight could be back in the market.
Put Call Ratio (PCR) also fell down sharply as significant Call writing was seen at strike prices 11,000, 10,900 and 10,800 ahead of its monthly expiry.
Call writing at higher levels suggests limited upside. Maximum Put OI is placed at 10,000 followed by 10,700 strikes while maximum Call OI is placed at 11,000 followed by 10,900 strikes.
“The Nifty index made a failure attempt to surpass psychological 11K zones and drifted towards its 50 DEMA of 10,730 levels. It wiped out its gains of last six trading sessions and bears are continuing their upper hand near to 10,950-11,000 zones from last four weeks,” Chandan Taparia, Associate Vice President, Analyst-Derivatives, Motilal Oswal Financial Services told Moneycontrol.
“It formed a Big Bearish candle on the daily and an Inverted Hammer on a weekly scale. Mechanical indicators like RSI has given a negative crossover and if it sustains below 10,850 zones,” he said.
Taparia is of the view that short-term trend could turn negative for a decline towards its 50% retracement at 10,650 levels while on the upside 10,950-11,000 zones could continue to act as a big barrier to change the medium-term market set up.
Here is a list of top 10 short-term trading ideas which could give 3-11% return in the next one month:
Analyst: Analyst: Dinesh Rohira, Founder and CEO of 5nance.com
Gruh Finance | Buy | TP: Rs 347| Stop-loss: Rs 305 | Upside: 5%
GRUH Finance traded in positive momentum for consecutive sessions after remaining muted for short period and subsequently managed to make a decisive breakout from its 200-days moving average placed at 298 levels.
The scrip made a healthy correction in last two months from a price-band of 340 odd levels towards a low of 240-250 levels.
After consolidation, the scrip made a strong rebound by taking crucial support at 280 levels and continued to remain upward with marginal headwinds.
The scrip also witnessed a substantial volume growth during the same period and formed a long bullish candlestick pattern on its weekly price chart.
The momentum indicator outlined a positive divergence in price with its weekly RSI at 57 levels, while MACD is likely to witness bullish crossover to trade above its Signal-Line in the coming session
Zee Entertainment | Sell | Target: Rs. 430 | Stop-Loss: Rs. 470 | Downside: 4%
Zee Entertainment continued to trade in negative trajectory on its six-month price chart despite making an initial recovery in past one month, but it failed to sustain the momentum in recent session to slip from its 200-days moving average on closing basis placed at 490 odd levels.
Despite its attempt to reverse a trend in one session, the scrip failed to sustain the momentum to trade below its psychological level which is seen at 450 odd levels. It further formed a solid bearish candlestick pattern on both weekly and daily price chart.
Further, a weekly RSI stood at 42 odd levels indicating negative divergence with respect to price, and MACD is likely to witness bearish crossover in the coming session to trade below its Signal-Line.
Graphite India | Sell | Target: Rs. 770 | Stop-Loss: Rs. 830 | Downside: 3%
Graphite India continued to trade substantially under negative trajectory over past one-month after making a healthy rebound from its October fall.
However, it failed to sustain the momentum to consolidate from a higher band of 1050 odd levels towards a low of 790 levels currently.
It remained under selling regime entire week to further slip below its 200-days moving average currently placed at 844 levels indicating a sustained pressure.
It formed a bearish candlestick pattern with small upper tail on its weekly price chart and similar formation is seen on the daily price chart.
The momentum indicator continued to outline weak trend with its weekly RSI at 41 level which signals downward divergence in price coupled with MACD trading below its Signal-Line on the weekly chart.
Analyst: Jay Purohit, Technical & Derivatives Analyst, Centrum Broking Limited
Adani Ports | Sell| LTP: Rs 359.20| Target: Rs 335-330| Stop Loss: Rs 383| Downside 8%
After a decent rally in November, the stock has started moving in a sideways direction. On Friday, the stock price gave a breakout from the consolidation phase of the last three weeks.
But, it failed to sustain above the breakout level and corrected sharply with heavy volumes, which is a negative sign for the stock.
Also, we are observing the formation of a Bearish Harmonic Pattern called ‘Bearish Bat’ on the daily time scale and the ‘Potential Reversal Zone (PRZ)’ is placed at 377.50 – 379.90.
Since the stock has started correcting from PRZ along with the negative divergence of ‘RSI’ oscillator, we may see 335 – 330 level in the coming days. Thus, any bounce towards 370 shall be used as a shorting opportunity with a stop-loss of 383.
Pidilite Industries | Sell around 1,165| LTP: Rs 1,140| Stop Loss: Rs 1,213 | Target: Rs 1,060 – 1,040| Downside 7%
The stock witnessed a decent rally in the last few weeks and made a new all-time high last week. But, the stock failed to hold at a higher level and gave a failed breakout on the daily chart.
Also, we are witnessing the formation of a ‘Triple Top’ pattern on the weekly time scale which is a reversal chart pattern. The momentum oscillator ‘RSI’ is showing negative divergence on both daily and the weekly time scale, indicating a reversal on the cards.
Looking at the technical evidence, we are expecting a correction in the stock towards 1060 – 1040 level in a coming month. Thus, one can initiate a short position in the counter in the zone of 1165 – 1170 with a stop-loss of 1213.
Tata Global Beverages | Buy| LTP: Rs 215.60| Stop Loss: Rs 205| Target: Rs 235 – 240| Upside 11%
After a sharp rally from 111.60 – 325.75, the stock has started correcting from the start of the calendar year 2018. In this phase, the stock price has corrected by around 40 percent from its 52 week’s high.
But, taking support around the 61.80% retracement level of the mentioned rally, which also coincides with ’50 EMA’ on the monthly chart. The stock has started rebounding from the last few days and is now showing some strength on the daily chart.
The momentum oscillator such as ‘RSI’ is also showing positive divergence from the oversold territory on both daily and weekly time scale.
Considering the current chart structure, we are expecting a bounce in the stock towards 235 – 240 level. This bullish view will negate if the stock closes below 205 level.
Brokerage Firm: SMC Global Securities
HPCL | Buy| LTP: Rs 250.05| Target: Rs 275| Stop Loss: Rs 230| Return 10%
The stock closed at Rs 250.05 on 21st December 2018. It made a 52-week low at Rs 163 on 05th October 2018 and a 52-week high of Rs. 435 on 15th January 2018.
The 200-days Exponential Moving Average (DEMA) of the stock on the daily chart is currently placed at Rs 276.45. The stock has witnessed profit booking from all-time high and has registered yearly low in a single swing.
Then after, it has retraced some of its losses and consolidates in a narrow range forming a “Triangle Pattern” on the weekly charts. It has managed to close on verge of a breakout.
Moreover, there is a rise in volume activities along with the price which indicates that buying is aggressive for the stock. Therefore, one can buy in the range of 245-247 levels for the upside target of 270-275 levels and a stop loss below 230.
InterGlobe Aviation | Buy| LTP: Rs 1,154.45| Target: Rs 1,230-1,250| Stop Loss: Rs 1,060 | Upside 8%
The stock closed at Rs 1,154.45 on 21st December 2018. It made a 52-week low at Rs 691 on October 9, 2018 and a 52-week high of Rs. 1,520 on 20th April 2018.
The 200-days Exponential Moving Average (DEMA) of the stock on the daily chart is currently at Rs 1050.38. We can see on charts that stock was forming an “Inverted Head and Shoulder” pattern on weekly charts, which is bullish in nature.
Last week, it has given the neckline breakout of pattern and has gained around 9 percent. Also, it has managed to close above the same, so, buying momentum may continue in coming days.
Therefore, one can buy in the range of Rs 1,135-1,145 levels for the upside target of Rs 1,230-1,250 levels and a stop loss below Rs 1,060.
Brokerage Firm: Karvy Stock Broking
Bajaj Finance | Buy| LTP: Rs 2,601| Target: Rs 2,750| Stop Loss: Rs 2,450 | Upside 6%
Bajaj Finance managed to close with gains of more than 4%, whereas NIFTY Financial Services Index closed with gains of 1% on a weekly closing basis exhibiting outperformance of the stock in comparison to the benchmark. After placing a swing low of 2332 in the previous week stock witnessed a gradual recovery in last few trading sessions.
The stock price consolidated above its 21 & 50-DEMA which is currently placed near 2487 & 2441 respectively, while holding well above its longterm 200-DEMA (2274).
On the momentum setup 14-period weekly RSI has witnessed positive crossover of its 9-pd signal line above the equilibrium level, exhibits strength in the counter and momentum may accelerate further in sessions to come.
Prices managed to sustain above its middle the Bollinger Band (20,2) in the last couple of sessions. Hence we recommend Smart Trader to initiate a Long position on dips near 2570 levels for the higher target of 2750, keeping a stop loss below 2450 levels.
Exide Industries | Buy| LTP: Rs 263| Target: Rs 280| Stop Loss: Rs 245| Upside: 6%
Exide Industries has outperformed Nifty and closed the week with the positive return of around 2.27 percent. Whereas, Nifty has closed the week with the negative return of around 0.45 percent.
The stock has seen profit taking from the high of around 304.70 levels, which has dragged the stock below all its major moving averages and made the low of 240.10 levels.
Thereafter, the stock has found the support around 200 DEMA and bounced well from the said lower levels with supportive volume formation on daily charts.
On technical setup, the 14 period RSI is pointing northward and trading comfortably above the signal line. The parabolic SAR is trading below the price action on daily charts which indicates uptrend in the stock will remain intact.
The recent development in the stock suggests that the stock is well placed to take it up move. Hence, we are suggesting smart trader buy the stock for the target of 280 levels with a stop loss placed below 245 levels.
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Source: Moneycontrol
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