Dalal Street continued to trade on a sluggish note last week as higher valuations weighed on the market amid lack of triggers. Analysts say investors will struggle to figure out a strategy to play. Milan Vaishnav picked the following stocks based on their technical charts, which can potentially help investors make the most of this lacklustre market.
Maruti |Sell | Target : Rs 6550
The stock is presently in a descending triangle formation which has resulted out of the structure of a similar bottom in the range of 6480-6500 and with sharply falling tops. The daily MACD is in continuing sell mode. The price has slipped below its 50 and 100DMA which is bearish. The RSI has marked a fresh 14-period low. The weekly RSI, too, is seen making lower highs upon visual inspection. The levels of 6950 should be used as a stop-loss.
BEML | Sell | Target: Rs 820
This stock has shown a couple of signs which point towards possible weakness over the coming days. After failing to clear a double top resistance, the stock retracted. It breached its 50-DMA and presently sits on its 100- DMA. The RS line against the broader CNX500 index is seen inching lower and has also fallen below its 50-DMA. The daily MACD remains in continuing sell mode. On the weekly charts, the weekly RSI has shown a bearish divergence against the price, and it is seen making lower tops. A fresh sell signal also emerged on the weekly Stochastic. Any close above 1025 should be used as a stop-loss.
NCC | Buy | Target: Rs 108
The stock suffered a sharp set back due to negative news flow over previous days. It has taken support over its multi-month upward rising trend line which also coincides with the 200-DMA, and another multiple pattern supports. The daily MACD is about to show a positive crossover over the coming days. The daily Stochastic remains negative. The stock moved past the levels of 100 and as per the options data, if it stays above 100, it can potentially test 105 and 108 levels. Any close below 95 should be treated as a strict stop-loss. Gemstone Equity Research & Advisory Services.
SBIN | Sell | Target: Rs 328
The stock cleared its significant double top resistance that was formed in the 326-334 range and tested highs near 364 levels. However, it witnessed some corrective moves after that. Based on a couple of signals that have emerged, the stock may see some weakness and may complete its throwback. The stock has slipped below its short term 20-DMA, and this can infuse some short term weakness. The daily MACD stays in continuing sell mode. The RSI remains neutral against the price, but it is seen marking lower tops. Similar formation in RSI is also observed on the weekly charts. Any close above 355 should be used as a stop-loss.
Hedged Option Call
The NIFTY50 has shown some fatigue and has also demonstrated some signs of likely distribution at higher levels. The weekly options data continues to show the strike price of 12000 having the highest amount of Call OI built up. This means that there are minimal chances of any significant surge in the markets beyond this point. Despite some minor pullbacks happening, the broader trend is likely to have a negative bias.
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)