Podcast | Stock picks of the day: More pain ahead for market; use rallies to short Nifty

The markets ended on a flat note in an eventful last week with a slightly positive bias. However, the final session turned the tables as the Budget proposals failed to cheer the participants and that in turn triggered a sharp decline in the Nifty, which engulfed all the weekly gains.

We expect the excitement to continue this week as the earnings season would kick in and IT heavyweights -- TCS and Infosys -- will announce their results on July 9 and July 12, respectively.

On the macroeconomic front, IIP and CPI inflation data will be unveiled on July 12. Besides, the progress of monsoon and global developments will also be watched.

After the initial overhang of the Union Budget, the focus now shifts to the earnings season. Chart patterns indicate a further decline in the Nifty towards 11,400 levels. We advise traders to use a 'sell on rise' approach.

Here is a list of top three stocks which could return 4-8% in the next 3-4 weeks:

Indiabulls Housing Finance: Sell July Futures| Target: Rs 640| Stop-Loss: Rs 730| Downside 8.6%

Indiabulls Housing Finance has been trading with a negative bias for the last nine months and still, there is no change in the trend yet.

After retesting its crucial support placed around Rs 550 levels, it recovered swiftly but couldn’t surpass the resistance hurdle placed at 100-days exponential moving average (EMA) on the daily chart.

The chart pattern and the overall market scenario are also in sync for further decline. We advise creating fresh shorts within the given range of Rs 700-705.

IndusInd Bank: Sell July Futures| Target: Rs 1425| Stop-Loss: Rs 1525| Downside 4%

The recent decline in the banking index has dented sentiment across the board and IndusInd Bank too is facing the heat.

It has failed to surpass the hurdle around Rs 1550 levels and witnessed a sharp sell-off, indicating a negative trend to extend further. We suggest creating fresh shorts within Rs 1485-1495 range.

Lupin: Sell July Futures| Target: Rs 700| Stop-Loss: Rs 760| Downside 6%

Mostly pharma counters are trading in a prolonged downtrend and Lupin is no different. After breakdown from the trading range, it has witnessed marginal bounce, offering a fresh shorting opportunity to those who had missed the chance earlier. We advise creating shorts in the mentioned zone of Rs 742-744.

(The author is VP-Research, Religare Broking Ltd)