By Nagaraj Shetti
After displaying choppy movement in the final couple of sessions, Nifty ultimately slipped into a steep fall on Wednesday and closed the day reduce by 189 points. After opening on a slightly positive note on Wednesday, Nifty began to show gradual weakness considering that opening. Intraday pullbacks of in-involving have s and they are sold into rises. The Nifty closed close to the low.
A lengthy adverse candle was formed, that closed under the current swing low of 14745 levels. The industry is now nearing a reduce variety of final 14-15 trading sessions at 14500 levels. This could be a adverse indication and a move under 14,450 could open a sharp weakness in the close to term.
Nifty is now sliding down to yet another essential help of ascending trend line on the day-to-day chart (connecting the swing lows of 24th Sept and 30th Oct) about 14,650 levels and a move under this region could open broader weakness for the industry ahead.
On the weekly chart, the significant help of 10 week EMA is intact about 14,580-14,550 levels. The Nifty has sustained above this moving typical help for a lot of months with minor whipsaws. Hence some more weakness down to this reduce help region could be anticipated in the close to term.
The brief term trend remains weak and the industry is nearing significant cluster help about 14,500-14,450 levels, as per day-to-day/weekly timeframe charts. There is a possibility of an upside bounce from this cluster help in the next couple of sessions. The strength of the industry throughout upside bounce could be significant to hold on help and show sustainable bounce. Immediate resistance is placed at 14,850.
Stock Picks:
Buy KEI Industries Ltd – (CMP Rs 547)
After moving into a sideways variety more than the final one month, the stock value has witnessed upmove in this week and closed larger. This pattern indicates the opportunity of a sharp upside breakout of the variety of about Rs 530 levels. The bigger timeframe chart like weekly signal positive sequential movement like larger tops and bottoms. Further upside from right here could kind a new larger major of the sequence. Weekly 14 period RSI has turned up which signal a strengthening of upside momentum in the stock value.
Buying can be initiated in KEI Industries Ltd at CMP (Rs 547), add more on dips down to Rs 520, wait for the upside target of Rs 610 in the next 3-4 weeks. Place a stoploss of Rs 505.
Buy Multi-Commodity Exchange of India Ltd – (CMP Rs 1,607)
The sharp trended decline of the earlier couple of months appears to have ended in this stock value. After displaying a variety movement in the final couple of weeks, the stock value has shifted into an upside bounce not too long ago. The final two sessions upmove is placed at the verge of moving above the vital a number of resistance of about 10&20 period EMA as per the notion of alter in polarity. Volume has began to expand and weekly 14 period RSI shows positive indication.
Buying can be initiated in MCX at CMP (1,607), add more on dips down to Rs 1,540, wait for the upside target of Rs 1,770 in the next 3-4 weeks. Place a stoploss of Rs 1,500.
(Nagaraj Shetti is a Technical Research Analyst at HDFC Securities. The views expressed are the author’s personal. Please seek the advice of your economic advisor just before investing.)