Bears have gripped the Indian markets firmly as benchmark indices turned volatile and corrective on Monday. Nifty50 ended the session at the low point of the day with a triple digit cut following a 100-point gap-up opening, clearly suggesting a weakening uptrend ahead of the much awaited Union Budget and the Thursday monthly expiry session.
Further, it’s the third straight session of declines for the index forming “Three Black Crows”, which is a bearish candlestick pattern. Moreover, Nifty has shut shop below the 20-DMA support line at 14,300, which was acting as the stop loss line from 3 Nov 2020. A sustained trade below 14,200 will extend the declines to levels of 14,080-13,900. Though, Technical Indicator RSI on a shorter time frame has reached oversold territory, price actions remain weak. Only a trade beyond 14,450-14,500 will trigger short covering rallies, taking the index back to levels of 14,600-14,700.
- CMP: Rs 836
- Target: Rs 900
- Stop loss: Rs 790
Stock has resumed uptrend following a brief correction. Further, it took support at the 50-DMA and cluster of recent lows around Rs 790, suggesting strength in the stock. RSI, too, has turned northwards, forming a positive reversal confirming the bullishness dominant.
Bajaj Finance Futures: SELL
- CMP: Rs 4,918
- Target: Rs 4,600
- Stop loss: Rs 5,100
The stock has broken down from a Bearish Flag pattern, triggering the start of a downtrend. Further, it also closed below its immediate support of Rs 5,000-4,950 being the 20-DMA and 50-DMA respectively. RSI has also turned lower from below the 60-level, indicating weakness in the stock.
Aditya Agarwala is Senior Technical Analyst, YES Securities. Views are his own.)