On the weekly price chart, the Nifty index formed a bearish ‘long-legged Doji’ kind of candlestick pattern suggesting indecision among traders on direction.
The Indian equity market ended the December F&O series on a flat note with a negative bias, down about 0.7 percent expiry-to-expiry (EoE) coupled with a weak performance week-to-week.
The market made a strong rebound for the two consecutive sessions in the past week after a global selloff that dragged the indices below crucial level. However, it managed to recoup from downward swing to limit the decline post-1000-points rally in the US market that cheered the domestic market.
During a week, Nifty sustained above its 200-days EMA placed at 10,740 despite slipping below its crucial support placed at 10,550 on an intraday basis to make a weekly low of 10,534 but managed to rebound from this lower level.
The index made a weekly high at 10,963 which now forms an important resistance for the index in short term.
On the weekly price chart, Nifty formed a bearish ‘long-legged Doji’ kind of candlestick pattern suggesting indecision among traders in direction, while it made a small bearish pattern on its daily price chart.
The momentum indicator signaled a slight negative divergence with its weekly RSI at 50, while MACD continued to trade below its signal-line.
With index managing to sustain above important level of 10,740 on a closing basis, higher resistance is currently placed at 10,963, while support is seen at 10,550.
The global events, especially the US government shutdown coupled with ongoing trade truce, are likely to trigger setback for the global market.
However, with major events all behind, the market is now expected to take cues from Q3FY19 earnings which is due from next month. Hence there could be stock specific momentum.
Given a stable crude oil price coupled with strengthening rupee, we are positive on market in short term, but continue to remain cautious with selective trade opportunities only.
As indicated in the current week, we continue to maintain a rangebound trading level at 10,963 on upside and 10550 on the downside.
Here is a list of top two stocks which could return up to 4 percent in next one month:
Welspun Corp: Sell | LTP: Rs 139| Target: Rs 133 | Stop loss: Rs 148 | Downside: 4 percent
Welspun Corp continued to trade in negative trajectory during the entire week to slip below its crucial level of 200-days moving average placed at Rs 140, and thus witnessed a sustained selloff throughout the week.
Although it made a decent rally after forming a low of Rs 125 toward a high of Rs 186 on its six-month price chart, it failed to continue with momentum to breach below crucial support at Rs 115.
Despite its attempt to reverse the trend in a couple of sessions, the scrip once again witnessed a sell-off in the last four sessions which signaled a bearish sentiment.
It formed a solid bearish candlestick pattern on the weekly price chart coupled with small bearish one on its daily chart.
Further, weekly RSI is at 48 indicating negative divergence, and MACD is likely to witness bearish crossover in the coming session to trade below its signal line. We have a sell recommendation for Welspun Corp.
DLF: Sell | LTP: Rs 177| Target: Rs 170 | Stop loss: Rs 186 | Downside: 4 percent
DLF Ltd moved downwards for five consecutive sessions after making a marginal rally in mid-December. It slipped below its 200-days moving average placed at Rs 187 in the expiry session.
On its six-month price chart, the scrip has consolidated from a price-band of Rs 220 towards lower support of Rs 150. From here it has made a strong rebound towards a high of 190.
However, failing to sustain the momentum, the scrip formed a bearish candlestick pattern with small lower tail on its weekly price chart coupled with the formation of a solid bearish pattern on daily chart.
The momentum indicator continued to outline weak trend with its weekly RSI at 46 which signals downward divergence in price coupled with MACD trading below its signal line on the weekly chart. We have a sell recommendation for DLF Ltd.
Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.
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