By Nagaraj Shetti
The decline with choppy trend continued in the marketplace for the third consecutive session on Wednesday and Nifty closed the day reduce by 26 points. After opening on a positive note, Nifty made an try to move up in the early to mid component of the session. Intraday weakness got triggered at the higher of 15839 in the afternoon and the marketplace showed a gradual weakness from the highs in the second half and closed close to the lows.
A little damaging candle was formed with minor upper shadow. This pattern signal continuation of weak trend amidst a variety bound action in the marketplace. Wednesday’s damaging candle has overlapped the equivalent damaging candle of earlier session. This action has not negated the current uptrend in the marketplace and such consolidation movements close to all time higher could at some point outcome in an upside breakout of the hurdle.
After displaying sharp declines from all-time highs in previous, the Nifty witnessing a variety bound action this time could indicate that the marketplace is preparing for a sharp movement on either side. The all round chart pattern signal greater possibility of an upside.
The quick term trend of Nifty continues to be choppy with weak bias. The next assistance of 20 day EMA could give base at 15670 in the quick term. The variety bound action is probably to continue for the next session. The close to term higher low variety to be watched at 16650-16850 levels.
Stock Picks:
Buy Rashtriya Chemicals & Fertilizers Ltd- (CMP Rs 83.70)
The Fertilizer stock (RCF) has been in a variety bound action due to the fact previous 6 weeks, prior to displaying upside bounce in this week. The stock price tag is presently moving up and is anticipated to stage upside breakout of the down sloping trend line, which is at Rs 85-86 levels in the quick term. Hence, a sustainable upmove above this region could open a sharp uptrend in the close to term. On the weekly chart, the stock price tag is sustaining above the quick assistance of weekly 10 period EMA at Rs 81 levels. Weekly 14 period RSI shows positive indication.
Buying can be initiated in RCF at CMP (83.70), add more on dips down to Rs 80, wait for the upside target of Rs 93 in the next 3-4 weeks. Place a stoploss of Rs 77.50.
Buy General Insurance Corporation of India – (CMP Rs 208.20)
After displaying a variety bound action in the last one month, the stock price tag has shifted into a affordable upside bounce in this week so far. Currently the stock price tag is creating an try to stage upside breakout of the variety at Rs 212 levels. The quick weekly assistance of 10 period EMA is holding and resulting in a decent upside bounce in the stock price tag at Rs 200 levels. The volume and weekly RSI shows positive indication.
Buying can be initiated in GICRE at CMP (208.20), add more on dips down to Rs 200, wait for the upside target of Rs 230 in the next 3-4 weeks. Place a stoploss of Rs 194.
(Nagaraj Shetti is a Technical Research Analyst at HDFC securities. Views expressed are the author’s personal.)