The Indian stock market registered eighth straight week of losses on Thursday, a streak last seen in 2001, weighed down by persistent foreign capital outflow and weak domestic and global macroeconomic and geopolitical backdrop.
On October 1, the Sensex declined 570.59 points, or 0.79%, to close at 71,909.70, while the Nifty 50 settled 198.50 points, or 0.88%, lower at 22,421.95, after recovering from the day's lows.
This week's bearish trend has resulted in a record 8 weeks of consecutive declines in trot that was repeated after two decades, as per weekly timeframe chart.
The Indian equity market is closed on Friday, October 2, for Mahatma Gandhi Jayanti.
Nagaraj Shetti, AVP, Technical Research at HDFC Securities noted that the Nifty 50 index is currently placed around the crucial support of ascending trend line at 22,400 levels (connected between the swing lows of mid of April 25 and early April 26). But still, there is no significant evidence of any bounce back emerging from the lows.
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“The underlying trend of Nifty 50 continues to be weak. Further decline below the key support of 22,200 could trigger next round of weakness down to 21,800 levels by next week,” said Shetti.
However, according to him, any bounce back from here could find crucial overhead resistance around 22,700 levels.
Stocks To Buy And Sell
Nagaraj Shetti has recommended two stocks to buy and sell for short-term. He suggests trading in these stocks for a timeframe of 2-3 weeks.
The technical stock picks for short-term are Siemens Energy India and Grasim Industries shares.
Siemens Energy India | Buy | Target Price: Rs 3,580 | Stop Loss: Rs 3,190
After forming a lower bottom in last month, Siemens Energy stock price moved up strongly over the next one month. The stock has sustained above the crucial 200-day EMA this week after violating below it last week. Currently, placed at the edge of a breakout of consolidation resistance at Rs 3,350 levels. Volume patterns and daily RSI show positive indication, Shetti said.
He recommends buying Siemens Energy shares at Rs 3,340 for a target price of Rs 3,580, while maintaining a stop loss of Rs 3,190. The timeframe for this trade is 2-3 weeks.
Grasim Industries | Sell | Target Price: Rs 2,780 | Stop Loss: Rs 3,085
Grasim Industries share price witnessed sharp fall this week and closed lower by around 7%. The bearish chart pattern like lower tops and bottoms is intact and the stock price is currently declining in line with the formation of new lower bottom.
According to Shetti, Grasim Industries stock price also closed below the crucial support of 200day EMA on Thursday. Volume has expanded during breakdown in the stock price and daily RSI shows negative indication.
He has a ‘Sell' call on Grasim Industries at Rs 2,965 for a target price of Rs 2,780, and a stop loss of Rs 3,085.
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