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Hot Stocks | Bet on Bajaj Finance and HCL Tech, sell JSW Steel for up to 10% return in short term

JSW Steel has given bearish breakout from the Head and Shoulder pattern on the daily chart. It has breached crucial supports of 50 and 100-day EMA. Indicators and oscillators like RSI and MACD have turned bearish on the daily charts.

January 31, 2023 / 06:38 AM IST
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On January 30, the Nifty managed to hold above its 200 DEMA (daily exponential moving average) support, placed at 17,550-odd levels. In last four trading sessions, it registered a massive fall of almost 800 points. Lower tops and lower bottoms formation is intact on the daily chart of the Nifty and the positional trend remains bearish. Previous support of 17,750-17,800 could interchange its role as a resistance going forward.

On the monthly time-Frame, Bearish Engulfing candlestick pattern which was formed in December 2022 is now activated, as support of 17,774 is breached in the current month.

The Nifty Midcap Index has got strong support at 30,000-odd levels, derived from a triple bottom formation. Sustainable level below 30,000 could intensify selling pressure in Midcap segment.

Percentage of stocks above their 200 DMA (daily moving average) in NSE500 have nosedived to 43 percent, which was at 68 percent in the starting of the December 2022 month. Any reading below 50, indicates weak breadth.

Technical setup of global equity market is bullish, which could provide some support to the Indian markets but domestic events like ongoing result season and upcoming Union Budget on February 1, 2023 could decouple the move in Indian markets for the short term.

We recommend traders to utilize pullback rallies to lighten the long commitments. Below 17,400, Nifty could fall towards next support of 17,035. Resistances for Nifty are expected at 17,774 and 18,000.

Pullbacks are part of the bearish setups and the same can not be ruled out after such a sharp fall in short span of time, especially ahead of the event like Union Budget. Sustainable level above 17,800 in Nifty could pull the index towards next resistance of 18,000.

Here are two buy calls and one sell call for short term:

Bajaj Finance: Buy | LTP: Rs 6,022 | Stop-Loss: Rs 5,770 | Targets: Rs 6,400-6,600 | Return: 10 percent

The stock price has bounced back sharply on January 30 by rising more than 4 percent with jump in volumes. RSI (relative strength index) oscillator has exited from the oversold zone on the daily chart.

MACD (moving average convergence divergence) has crossed its signal line on the upside on daily time frame. The stock has found support on upward sloping trendline on the weekly chart, which raises the probability of the bullish trend reversal.

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HCL Technologies: Buy | LTP: Rs 1,135 | Stop-Loss: Rs 1,090 | Targets: Rs 1,190-1,250 | Return: 10 percent

The stock price has formed Bullish rounding bottom formation on the daily chart with volume rising along with the price rise. IT sector has been outperforming in the current market scenario and same is expected to continue.

The stock is placed above all important moving averages. Indicators and oscillators have also been showing strength in the current uptrend.

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JSW Steel: Sell | LTP: Rs 702 | Stop-Loss: Rs 740 | Targets: Rs 665-640 | Return: 9 percent


The stock price has given bearish breakout from the Head and Shoulder pattern on the daily chart. It has breached crucial supports of 50 and 100-day EMA. Indicators and oscillators like RSI and MACD have turned bearish on the daily charts.Image163012023

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Vinay Rajani
Vinay Rajani is the Senior Technical & Derivative Analyst at HDFC Securities.

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