Gaurav Ratnaparkhi of Sharekhan said from trading perspective, one can look to initiate short position, with reversal above 10,805 i.e. the high point of the recent impulsive fall.
Gaurav Ratnaparkhi
The Nifty, in the week gone by, posted a negative close after 5 consecutive positive weeks. Despite multiple attempts by bulls to take out the recent high of 10,929, it remained invincible. On the higher side, a medium term falling trend line from the all-time high of 11,171 proved to be a strong hurdle, which didn't allow the bulls to stretch their arms.
On the hourly chart, the index has formed a distribution triangle over the last 2-3 weeks. After completion of the distribution pattern, the Nifty formed an impulse on the downside on the hourly chart and the same has been retraced by more than 61.8 percent.
From a trading perspective, one can look to initiate short positions. A short term target on the downside will be the May low of 10,417, with the potential to slide down to lower levels.
Here is the list of 3 stocks to bet on:
M&M Financial futures: Sell | Stoploss - Rs 481 | Target - Rs 415
The stock has broken a short term rising trendline on the downside & has even retested it. Thus this is a high probability level to initiate a fresh short position.
The short term as well as the medium term momentum indicators are in bearish mode.
IndusInd Bank futures: Sell | Stoploss - Rs 2,000 | Target - Rs 1,770
The stock has completed an Impulse on the upside on the weekly chart. To complete the same, the stock has formed an Ending Diagonal pattern on the daily chart.
Thus the stock looks poised to retrace the entire impulsive rise. Momentum indicators on various time frames are in line with the bearish expectation.
Godrej Industries: Buy | Stoploss - Rs 606 | Target - Rs 670
The stock has formed a triangular pattern on the daily chart & has broken out on the upside recently.
The rally has started from the junction of the 40 DEMA & the daily lower Bollinger Band; so it is likely to sustain in the higher territory.
The daily momentum indicator is starting a new cycle on the upside from the equilibrium line.
Disclaimer: The author is Senior Technical Analyst at Sharekhan. 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.