After a firm opening, the Nifty gave up the early morning gains and remained under pressure throughout the session on February 12. The Nifty 50 lost 166 points to close at 21,616. Declining shares outnumbered the advancing shares as the advance-decline ratio stood at 0.33 on the BSE, lowest since January 23.
The Nifty closed on a weak note below its 11 and 20 DMA (day moving average). In the derivatives, we have seen aggressive Call writing at 21,800-22,000 strikes. Moreover, we have seen the index forming multiple tops around 22,000 mark during the last few days, suggesting that on the upside, the 21,800-22,000 levels would act as a strong resistance. Therefore, traders are advised to remain cautious till the benchmark closes above 22,000.
Immediate support for the Nifty is seen at 21,448 and 21,137, derived from the previous swing lows.
The broader market indices like Midcap and Smallcap have started underperforming, compared to the Nifty, having lost 4.2 percent and 6.5 percent from their recent tops as against a 2.3 percent fall in the Nifty.
Short-term trend of the Midcap/Smallcap Indices turned bearish after many weeks as they closed below its important moving averages. Our advice for the traders is to remain cautious for the Midcap/Small cap space for the near term.
Here are two buy calls and one sell call for the next 3-4 weeks:
KEC International: Buy | LTP: Rs 655 | Stop-Loss: Rs 603 | Target: Rs 714-740 | Return: 13 percent
After breaking out on the weekly chart from the downward sloping trendline, the stock price is consolidating in a narrow range which we believe is a buying opportunity.
Primary trend of the stock is positive as it is trading above its important moving averages.
HCL Technologies: Buy | LTP: Rs 1,667 | Stop-Loss: Rs 1,575 | Target: Rs 1,770-1,850 | Return: 11 percent
The stock price has been forming bullish higher top higher bottom formation on the weekly chart. Momentum Indicators and Oscillators like RSI and MFI are in rising mode and placed above 60 on the daily chart, indicating strength in the stock.IT stocks are expected to continue their outperformance in the coming weeks.
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