“The price action demonstrates an inability to sustain higher levels, curtailing the scope for significant upward movements. This pattern indicates a market environment where caution and strategic planning are crucial, considering the challenges posed to sustaining profitable long positions,” he says. Edited excerpts from a chat:
Nifty ended in the red for the fourth consecutive week. Will it be a stupid idea to go long now given all the weak global cues and with the earnings season behind us?
The Nifty index embarked on a downward trajectory after reaching an all-time high of approximately 20000. Subsequently, it followed a pattern characterized by successive lower peaks and troughs, forming a discernible descending chart pattern. Adding to this, the index has consistently remained below its 21-day Exponential Moving Average (EMA), a sign that underscores the prevalence of a bearish trend.
The prevailing market scenario draws striking parallels to that of January 2023, a period marked by an extended downtrend accompanied by considerable market turbulence. Within such a backdrop, the conditions appear unfavorable for most long trades. The price action demonstrates an inability to sustain higher levels, curtailing the scope for significant upward movements. This pattern indicates a market environment where caution and strategic planning are crucial, considering the challenges posed to sustaining profitable long positions.
Nifty Bank has fallen around 2,500 points from its 52-week high. How does the trade set up look like now?
Since it made a lifetime high of 46369 the Bank Nifty has so far fallen by 2500 points. The index is persistently encountering resistance at the 44000 level, where the call side holds the highest open interest. The lower end of the support is noticeable around 43600, which aligns with the presence of the 100-day moving average (DMA). If this support level is breached, it could trigger additional selling pressure in the market. A break on either side will lead to trending moves.
Cochin Shipyard rallied 30% in the week after Q1 results. Do you see signs of the stock being at overbought level?
The stock has given a consolidation breakout on the daily chart, suggesting a rise in optimism; however, after a staggering rally the stock has entered into an overbought zone. A correction in the short term can’t be ruled out. Therefore, it would be prudent to enter the stock on dips only.
The recent rally in Zomato shares has also fizzled out after it went above Rs 100-mark on posting profit In Q1. What are the charts saying?
Following a staggering rally Zomato slipped sharply as it failed to sustain the selling pressure around 100. On the daily chart, it has fallen to 21EMA which suggests a chance of recovery if the price doesn’t fall below 21EMA (placed at 88). On the other hand, a fall below 88 may trigger a correction towards 83.Give us your top stock ideas for the week.
Buy ASTERDM 319 TGT 335 SL 308
The stock is uptrend on the daily chart, with a higher top higher bottom. Besides, the stock is sustaining above critical moving average. On the higher end, it might move towards 335. On the lower end, it has support at 308.
Buy EIH Hotels 223 TGT 250 SL 209
EIH HOTELS has shown reversal on daily charts, following a downwards consolidation breakout. Additionally, a positive crossover is apparent on the weekly Relative Strength Index (RSI), with a reading exceeding 50. Also a multiyear resistance can be seen near 220, above which stock can rally upto 250 in the near term. The stock’s price is trading above all the important moving averages. On the downside a support level can be identified at 205.