Markets continued to fall this week. A strong bounce back in the last two sessions from the lows helped to erase some of the losses seen in the early part of the week.
- By Subash Gangadharan
Markets continued to fall this week. A strong bounce back in the last two sessions from the lows helped to erase some of the losses seen in the early part of the week. Technical indicators too are giving weak signals. The Nifty trades below the 13-week and 50-week SMA. The 13-week SMA has in fact just moved below the 50-week SMA, which is a negative signal for the intermediate term. Both these moving averages are also sloping down, suggesting potential for more downsides in the intermediate term.
However, while the 14-week RSI is in decline mode, the 14-day RSI has made a positive divergence on the daily charts suggesting a pullback rally is possible in the near term. The Nifty could rally towards the 8575-8883 resistances in the near term before witnessing selling pressure once again and moving lower.
Buy Titan (Rs.881)
Target: 1070 | Stop Loss: 800
After falling sharply from a high of 1341 touched in February 2020, Titan touched a low of 720 on 24thMarch 2020. The stock has made an inverse head and shoulder pattern on the 15 min intraday charts. It has also broken the neckline, which implies more upsides are in store for this stock in the coming sessions. Technical indicators too are giving positive signals as the 20 min MA has crossed the 50 min MA from below. The 14-day RSI too has bounced back smartly from oversold levels.
The upward momentum is likely to accelerate once the stock can take out its recent highs of 934.
We therefore recommend buying Titan between 840 and 890 with a stop loss at 800. Targets are at 1070.
Buy Manappuram (Rs.102)
Target: 130 | Stop Loss: 90
Manappuram has corrected sharply from the highs of 181 touched in February. After making a low of 74.25 on 19thMarch 2020, the stock has bounced back strongly and made a double bottom on the daily charts. Today the stock crossed its recent highs of 101, suggesting a bullish outlook for the near term. Technical indicators too are giving positive signals as the 20 min MA has crossed the 50 min MA from below. The 14-day RSI too has bounced back smartly from oversold levels.
We therefore recommend buying Manappuram between 95 and 103 with a stop loss at 90. Targets are at 130.
- Subash Gangadharan is a Technical & Derivatives Analyst at HDFC Securities. Views expressed are the author’s own.