By Subash Gangadharan
Markets have corrected this week after the hefty rally seen in the previous two weeks. The Nifty has gradually corrected in the last four sessions making lower tops and lower bottoms in the process. The short term moving averages like the 20-minute MA too are sloping down and below their 50-minute MA indicating a weak trend for the near term. The 14-day RSI too has dipped lower and cut its 9-day EMA in the process.
Immediate downside targets for the Nifty are now at the next intermediate highs of 9889. A failure to hold above these levels could see the Nifty moving down further towards the next support of 9584. On the upside, the bulls could gain control only if the Nifty can convincingly cross the previous swing high of 10149.
Buy IndusInd Bank (CMP is Rs.523.15)
Stop Loss: 470
After falling sharply for several weeks and testing the intermediate supports of 235, IndusInd Bank has bounced back smartly and gradually made higher tops and higher bottoms on the daily charts.
Today, the stock has moved higher and broken out of the previous intermediate highs of 492 on the back of huge volumes, thereby indicating that the uptrend is here to stay.
Technical indicators too are giving positive signals as the 13-day SMA has just crossed above the 50-day SMA, indicating a MA crossover. The 14-day RSI too is in rising mode.
We, therefore, recommend buying IndusInd Bank between 500 and 525. Targets are at 600, while stop loss is at 470.
Sell Glenmark (Rs.384.45)
Stop Loss: 407
Glenmark has broken down from the 391-413 trading range it was trading within for the last one week. The breakdown was accompanied with healthy trading volumes, indicating that selling was intense.
Technical indicators too are giving negative signals as the 20 minute SMA has just crossed below the 50 minute SMA, indicating a MA crossover. The 14-day RSI too is in decline mode.
We, therefore, recommend selling Glenmark between 384 and 400. Targets are at 360, while stop loss is at 407.
(Subash Gangadharan is a Technical & Derivatives Analyst at HDFC Securities. Views expressed are the author’s own.)