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?
News and events have been sold into, and earnings led rebalancing also appears to have happened. There is a willingness to push ahead, but there is no sign of euphoria, and most of the recent days have seen lower highs and lower lows, ample evidence of declining trend in play. Further, the ratio of 50 to 200 DMA is at similar levels as in December 2022, post which a painful bear phase followed. So, yes the writing is on the wall with 18300 on the horizon. There are two opportunities ahead of us. One, play for a bounce off 50 DMA, near which we have closed for the last two days. Second, prepare for a buy on dips approach, while taking cues from the fact that even a tiresome bear phase that unfolded in Dec 2022, when similar conditions prevailed, lasted only for three months.Nifty Bank has fallen around 2,500 points from its 52-week high. How does the trade set up look like now?
Couple of days of Dojis and positive closes did give a whiff of positivity, but they were not sufficient to signal a reversal, letting the prevailing downtrend aim for 42780, which is another 1000 points down. A direct rise above 44200 could bring about short covering, but with upside prospects limited to 44750.
Cochin Shipyard rallied 30% in the week after Q1 results. Do you see signs of the stock being at overbought level?
Certainly, overbought signals are present, but one has to acknowledge that such signals need a different treatment during breakouts. It also needs to be noted that Cochin shipyard has had a multi year consolidation and a cup and handle breakout to top it, letting it train its eyes on 1000 and beyond. Dips to 770 may be used to re-initiate entries into this ride, with downside marker placed below 695.
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?
Zomato’s price is responding to negative divergences that had prevailed for some time. Allow a consolidation to unfold, but fresh entries are still feasible, eying a renewed attempt to breach 100, but with 78 pencilled in as a crucial level for the short term.
Give us your top stock ideas for the week.
1) ENGINERSIN (CMP: 152.9)
View: Buy
Entry range: 153 – 149
Target: 160 – 167Stoploss: 144
The stock has been on an upside since Feb 2023 and after gaining ~130% since then, the stock moved into a consolidation mode this month. Currently the stock has formed a Pennant candlestick pattern, which is a bullish continuation pattern, on daily charts hinting at positivity and we expect a pattern breakout to happen in the near future. Also, the MACD forest has shown exhaustion at lower levels supporting our assumption of an up move in coming days. We expect the stock to move towards 160 and thereafter towards 167 in coming weeks. All longs may be protected with stoploss placed below 144 levels.
EIHOTEL (CMP: 224)
View: Buy
Entry range: 224 – 219
Target: 232 – 240
Stoploss: 214
