Nifty Outlook and few trading ideas by Chandan Taparia, Derivatives and Technical Analyst at MOSL:
Nifty outlook:
Nifty index continued its profit-booking for the second consecutive session and corrected towards 10,000 mark. It formed a Bearish Belt hold candle followed by a Bearish Engulfing pattern on the daily chart. It has broken its rising support trend line by connecting the recent swing lows of 9,543, 9,646, 9,838 and 9,944. Now, if it sustains below 10,050, then profit-booking could continue towards 9,950-9,928 zones while on the upside hurdles are placed at 10,080 then 10,120 levels.
Stocks:
HAVELLS INDIA
Reco: BUY
Last Close: 486
Stop Loss: Rs 470
Target: Rs 515
Havells is moving in a Symmetrical triangle since last 10 weeks. The price faces a bit of a hurdle around Rs 487 and once this level is surpassed convincingly, the price should see a rally towards Rs 515, and then Rs 540-odd levels. A Symmetrical triangle is a continuation pattern and once this pattern is resolved, it signals higher prices.
ESCORTS
Reco: BUY
Last Close: Rs 677
Stop Loss: Rs 660
Target: Rs 710
The weekly trend in Escorts is sharply up and the prices have corrected from the June highs of 767. This correction has lasted for more than 7 weeks and this is the ideal time frame for a correction to get over. On the daily charts the price is taking support at Rs 645 as we see multiple lows around this level. Price decline from June'17 highs are in the form of a descending triangle, which is a continuation pattern. Price broke out of this pattern on July 28 on heavy volumes. At current levels, it offers a good scope for appreciation towards Rs 710.
PETRONET LNG
Reco: BUY
Last Close: Rs 208
Stop Loss: Rs 200
Target: Rs 225
Petronet has corrected from its highs of Rs 230 and it is now in a trading range of Rs 230-200 for more since last week of April 2017. Price declined to the support at Rs 200 and has formed a double-bottom in this vicinity. The longer trend is up and there is a chance that the price may have bottomed out here. At current levels, it offers an attractive risk reward scenario, thus consider buying this stock at current levels with a stop below Rs 200.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.