Shitij Gandhi
After hitting the lower circuit in intraday trade on March 23, the Indian market saw some recovery on March 24 with Nifty ending above 7,800-mark, taking cues from firm global markets.
Additionally, the market sentiment strengthened as the Finance Minister told media that the economic package to help through the coronavirus lockdown is being readied on priority.
However, on the technical front, Nifty and Bank Nifty are still not showing strength as prices are holding well below its short and long-term moving averages on broader charts.
Nevertheless, some technical bounce back after a steep cut in prices is always expected but rising volatility index with fears of COVID-19 among global investors will likely keep bears on the front foot as of now.
As far as levels are concerned, 8,000-8,100 levels are key resistance levels for the Nifty which should cap any sharp upside.
Here are three sell calls for the next 3-4 weeks:
Siemens | Sell | LTP: Rs 1,018.85 | Target price: Rs 780 | Stop loss: Rs 1,170 | Downside: 23%
Last week, the stock went below its 200-days exponential moving average on weekly charts placed at Rs 1,195 levels and since then we have witnessed a series of decline into the prices.
On the daily charts, the stock is maintaining its downtrend and can be seen trading in a sloping channel with the formation of a lower bottom pattern.
At the current juncture, negative divergences on secondary oscillators suggest further downside into the prices in the coming sessions once again.
Traders can take a short position in the stock in the range of Rs 1,020-1,050 for the downside target of Rs 780 with a stop loss above Rs 1,170.
For the last three months, the stock has been consistently maintaining its bull run and has been rising high with the formation of a higher high and higher bottom pattern on the daily and weekly intervals.
However, this week it fell sharply from its highs and slid below the rising trend line of the channel to close well below its 200-days exponential moving average on the daily charts.
The break down below the rising channel pattern can trigger a further selloff in the stock, going forward.
Traders can take short positions in the stock in the range of Rs 1,280-1,285 for the downside target of Rs 1,080 with a stop loss above Rs 1,400.
Tata Steel | Sell | LTP: 271.90 | Target price: Rs 210 | Stop loss: Rs 310 | Downside: 23%
The stock has been beaten down sharply ever since it has broken its 200-days exponential moving average on the monthly charts which is placed at Rs 388.
Since then, the stock has fallen nearly 28 percent and is now trading around Rs 271. At the current juncture, some consolidation can be seen in the prices after a steep fall, which has formed a descending triangle pattern on the daily charts.
This week, however, the stock has once again given a sharp breakdown below the pattern formation which can trigger the next round of selling.
Traders can take short positions in the stock in the range of Rs 270-275 for the downside target of Rs 210 with a stop loss above Rs 310.
(The author is Senior Technical Analyst at SMC Global Securities)
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