Shitij Gandhi
Despite starting the week on a negative note, the Nifty bounced back sharply from 10,800 levels on August 6, ending the day on a positive note led by gains in banking and auto stocks.
On the derivative front, marginal Put writing was observed in 10,800 and 10,900 strike, while 11,000 Call strike holds with second highest Open Interest in Calls after 11,200 strike.
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On the technical front,too, 10,750 should act as crucial support for the Nifty, which is where long-term moving averages on weekly charts are also placed. On the higher side, 11,000 levels should act as key psychological level for the Nifty.
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We expect the Nifty to consolidate in broader range of 10,750 to 11,000 levels in coming sessions with bearish bias and some volatility on the cards.
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Here are the top stock trading ideas that can give good returns:
Pidilite Industries: Buy | Target: Rs 1410 | Stop loss: Rs 1230 | Upside: 8 percent
The stock has been consolidating in broader range of Rs 1,180-1,300 for more than eleven weeks along with consistent buying on every dip.
On daily charts as well, prices have been maintaining above short and long- term moving averages. However, this week we have observed a fresh breakout onto the charts after a prolong consolidation along with higher volumes, which suggest further momentum in the prices moving forward.
So, traders can accumulate the stock in the range of Rs 1,300-13,10 for the upside target of Rs 1,410 levels with stop loss below Rs 1,230.
Berger Paints: Buy | Target: Rs 375 | Stop loss: Rs 320 | Upside: 10 percent
On the broader charts, fresh breakout above the key resistance level of Rs 340 have been observed this week after a consolidation of more than seven months. The breakout has been observed with higher volumes, which suggest a follow-up buying in coming sessions.
On daily charts, the breakout above the ascending triangle formation can be also be observed, which is generally traded as a bullish pattern.
So, traders can accumulate the stock in the range of Rs 340-345 levels for the upside target of Rs 375 levels with stop loss above Rs 320.
Sun TV Network: Sell | Target: Rs 419 | Stop loss: Rs 460 | Downside: 6 percent
The stock has been consistently trading lower and maintaining its bearish trend on daily and weekly charts, with prices holding well below its key moving averages for more than four months.
This week we have observed a fresh breakdown into the prices below a rectangle formation, which is generally traded as a continuation pattern of previous trend. The negative divergence on secondary oscillators is also pointing towards more downside into the prices.
So, traders can sell the stock in the range of Rs 442-446 levels for the downside target of Rs 419 levels with stop loss above Rs 460.
The author is Senior Technical Analyst at SMC Global Securities Ltd.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more. First Published on Aug 7, 2019 11:48 am