The Nifty50 fell below 17,000 to mark lowest weekly close in last seven months, down 0.91 percent at 16,945 for week ended March 24. There's still no respite for the bulls as any intermediate bounce is getting sold into and prices continue to move in a lower top-lower bottom formation.
Globally, the mounting concerns over a few banks and now domestically, the hiking of STT (securities transaction tax) has dampened the market sentiment. The market is currently oversold, but such financial issues can be very disruptive at times. Hence, traders should ideally avoid aggressive bets for a while.
From a technical point of view, we are not too far from the sacrosanct support zone of 16,850 - 16,800, which coincides with the September month swing low and 89-weekly EMA (exponential moving average).
We continue to remain hopeful but at the same time for momentum traders, it’s better to wait for some price confirmation once all this negativity subsides on global as well as domestic front. On the higher side, 17,200-17,250 has been acting as a sturdy wall and the bulls desperately need a convincing breakout beyond this to make a comeback.
Here are two buy calls for short term:
Great Eastern Shipping Company: Buy | LTP: Rs 624 | Stop-Loss: Rs 608 | Target: Rs 654 | Return: 5 percent
The stock prices declined gradually in last 3 months and the correction got arrested precisely around the key moving average of ‘200-day SMA’ level of Rs 540. We witnessed a decent recovery thereafter which was followed by some consolidation, which ideally can be construed as a base building process for this stock.
On Friday, amid the broader market nervousness, this stock was clearly bucking the trend. Technically, we can see a good price-volume breakout from the ‘Triangle’ pattern on daily chart.
We advise buying for a trading target of Rs 654. The stop-loss can be placed at Rs 608.
Cyient: Buy | LTP: Rs 1,001 | Stop-Loss: Rs 954 | Target: Rs 1,055 | Return: 5 percent
The entire IT space is undergoing a strong corrective phase on the back of global headwinds and there is no respite even after spending more than 12 months in this slumber phase. However, there are handful of mid-sized stocks within this pocket are clearly outshining their larger peers.
Cyient is clearly one of the rank outperformers as we can see a series higher highs higher lows in daily time frame chart.
On Friday, with stock surging on huge volumes, we can see yet another breakout in prices, indicating further upside in the coming days.
Traders can look to buy around Rs 990 - 980 for a near term target of Rs 1,055. The strict stop-loss needs to be placed at Rs 954.
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