The Nifty50 slipped below its crucial support placed at 200-days simple moving average (SMA) placed around 10,777 and 10,700 on Thursday. The next crucial support is placed at a swing low of 10,557, suggest experts.
The market sentiment remained dampened on Thursday too due macro factors. Bulls remained on the sidelines ahead of the outcome of the RBI policy meet outcome on Friday.
“The short-term trend is still negative because the index has failed to sustain above its rising trendline by connecting the swing lows of 9,952, 10,557 and 11,100 mark,” Abhishek Mondal of Guiness Securities Ltd.
“The trend reversal point in Nifty is seen on close above 11,180 (38.2 percent retracement levels of August 28 to October 1 downfall). Until then the market is bearish and can slide further lower towards 10770 (200 DMA) and 10640 (61.8 percent of 23rd March to 28th August up move),” he said.
Mondal further added that the Relative Strength Index (RSI) on the daily chart is 32.81, trading near oversold zone but with no divergence seen against price and the MACD continuously trading below the signal line, which indicates supply pressure to persist at higher levels.
The volatility index ended up by 7.62 percent at 18.11, still trading above its heedful mark of 16, suggests consolidated down move in the market.
On the Options front, maximum Call open interest of 30.59 lakh contracts is seen at strike price 11,500, followed by 11,200 which now holds 28.51 lakh contracts and maximum Put open interest of 37.64 lakh contracts is seen at strike price 10,500 followed by 10,700 which now holds 35.15 lakh contracts.
As per the options data, the immediate support is seen around 10,700 and 10,500 levels whereas 11,200 will act as a strong hurdle in the October expiry.
Here is a list of top 10 buy or sell ideas from experts which could give investors 2-19% return in the next 1-2 months:
Analyst: Rupak De, Technical Research Analyst at Bonanza Portfolio Ltd
Motherson Sumi Systems: Buy| CMP: Rs.242.85 | Target Rs 267| Stop Loss Rs.233| Return 10%
The stock, after a steep correction, is seen consolidating on the daily chart. On the weekly chart, the price has completed ABCD harmonic pattern which suggests a possibility of a bullish reversal in the stock.
A divergence in the daily RSI is being witnessed which may induce a positive shift in bullish momentum in the stock price. Traders can accumulate the stock in the range of Rs 240-245 for the target of Rs 267 and a stop loss below Rs 233.
Adani Ports: Buy| CMP: Rs. 329.75 | Target Rs 357| Stop Loss Rs 316| Return 8%
After prolong corrective phase, the stock has been consolidating at lower levels. On the daily chart, we saw the formation of an inverted hammer which suggests the possibility of a bullish reversal. The green candles on the daily chart were backed by decent volume. Traders can accumulate the stock in the range of Rs 327-332 for the target of Rs 357 and a stop loss below Rs 316.
Bata India: Sell| CMP: Rs 915.30| Target Rs 845| Stop Loss Rs 957| Return 7.65%
The stock price has given a breakdown from the consolidation pattern which suggests increasing pessimism in the stock. The fall in price was backed by a rise in volume.
The momentum oscillator RSI (14) is in bearish crossover and falling suggesting a continuation of bearish momentum. Traders can accumulate the stock in the range of 930-910 for the target of Rs 845 with a stop loss above Rs 957.
Analyst: Abhishek Mondal, Research Analyst at Guiness Securities Ltd
Housing Development Finance Corporation (HDFC): Buy| LTP: Rs 1,797.55 | Target: Rs 1,888 | Stop Loss: Rs 1736| Return: 5.03%
After giving a healthy correction from its all-time highs, the stock has formed a Bullish Harami Candlestick pattern on 28th September, which is a bullish reversal formation.
Apart from this, the stock has given a breakout of its downward slopping trend line on October 1. Key technical indicators, Relative strength index (RSI) is trading at 42.85, showing sideways positive momentum and stochastic has just come out from its oversold territory.
Traders can buy the stock around current level and add on dips around Rs 1780-1785 with a stop loss below Rs 1736 (closing) for the target of Rs 1888.
UPL: Sell| LTP: Rs 644 | Target: Rs 600 | Stop Loss: Rs 675 | Return: 6.83%
UPL is consistently trading below its short and mid-term moving averages as well as below its 38.2 percent retracement levels of July 19 to September 14, 2018 up move with moderate volumes in daily scale, which indicates that the bias can remain bearish for the next few trading sessions.
The Daily Relative strength index (RSI) is trading at 41.71 and MACD is continuously trading below the signal line whereas directional movement also indicates the negative strength.
Based on the above observations the stock is likely to move down in the near term. A trader can sell the stock future at current levels and add on some technical bounce around Rs 650-655 with a stop loss above Rs 675 (closing basis) for a target of Rs 600.
Aurobindo Pharma: Buy| LTP: Rs 771.60 | Target: Rs 862 | Stop Loss: Rs 720 | Return: 11.72%
After a decent correction from its 52-week highs, Aurobindo has bounced back strongly from its 50 percent retracement levels of Rs 696 (July 19 to September 7 up move) on September 21, 2018.
After some consolidation between Rs 727 to Rs 765 (38.2 to 23.6 percent retracement level), the stock has given closing above Rs 765 mark on October 1, 2018 with moderate volumes, which indicates limited downside.
On the daily scale, Relative strength index (RSI) is trading in the neutral zone and (+) DI is trading above (-) DI whereas OBV — On Balance Volume is showing an upward momentum.
Based on the above observations traders can buy the stock around current levels and add on dips around Rs 750-755 with a stop loss below Rs 720 (closing) for the target of Rs 862.
Analyst: Aditya Agarwala, Technical Analyst, YES Securities (I) Ltd.
Tata Global Beverage: Buy| LTP: Rs 234| Target: Rs 278| Stop Loss: Rs 216| Return 19%
On the weekly chart, Tata Global Beverages Ltd has turned upwards after taking support at the lower end of the wedge pattern placed at Rs 213 levels. Further, a sustained trade above Rs 240 will trigger a breakout from a trendline resistance taking it higher to levels of Rs 260-278.
On the daily chart, it is on the verge of a breakout from the neckline of an inverted Head & Shoulders pattern suggesting bullishness.
Moreover, RSI turned upwards after forming positive reversal suggesting higher levels in the coming trading sessions. The stock may be bought in the range of Rs 233-235 for targets of Rs 260-278, keeping a stop loss below Rs 216.
AU Small Finance Bank: Buy| LTP: Rs 563| Target: Rs 645| Stop Loss: Rs 540| Return 15%
On the daily chart, AU Small Finance Bank Ltd has formed a bullish Harmonic pattern following its recent decline indicating bottoming out process in the stock.
Further, the stock has witnessed pullback from the support zone of Rs 545 which happens to be the 150 percent Fibonacci extension level indicating buying at lower levels. The stock may be bought in the range of Rs 562-565 for targets of Rs 620-645, keeping a stop loss below Rs 540.
Analyst: Mustafa Nadeem, CEO, Epic Research
Hindalco Industries: Buy| LTP: Rs 253.45| Target: Rs 260| Stop Loss: Rs 250| Return 2%
The stock has maintained itself in a very volatile market and closed near Wednesday’s high with volume breakout. It has also given closing above the 61.8 percent Fibonacci level on the daily chart. We recommend buying from the current level for the target of Rs 260 with the stop loss of Rs 250.
Shriram Transport Finance: Sell| LTP: Rs 1079| Target: Rs 1040| Stop Loss: Rs 1115| Return 3%
The stock is showing weakness on the daily chart with decreasing volumes and it closed near today’s low. We recommend selling from the current level for the target of Rs 1040 with the stop loss of Rs 1115.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own, and not that of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
