How to trade Maruti, L&T, HEG, Graphite India and UltraTech Cement

The candlestick formation on the daily chart of Nifty50 index resembles engulfing pattern. On Friday, the index closed 69 points or 0.64 per cent lower, thus engulfing the previous candle. Theoretically, the formation is known as Bearish Engulfing pattern. 

The previous candle 'doji' indicated indecision. On Friday, it crossed the high of doji which was 10,866 level, indicating uptrend. However, the session ended breaking the low of the doji pattern, located at 10,798 levels. The session closed with negative sentiment as the index slipped below 10,798. Furthermore, as the session has engulfed the previous candle, the low of the day i.e. 10,756 holds strong ground hereafter, the chart suggests.

The current lower rising trend line of 10,700 stays as the support for the index while the immediate resistance falls at 200-day moving average (DMA), located at 10,837 levels.

Here's a look at the trading strategies for the stocks that made a buzz last week -

Maruti: The stock has breached the low of Rs 6,500 which was touched in October last year, initialising new levels of Rs 6,410. The weekly chart support comes at 200-DMA, located at Rs 6,248 level. The stock may enter bearish phase only below 6,200, breaching significant levels and supports, chart suggests. The traders and investors may look at consolidation for safer entry rather than aiming at bottom fishing.

L&T: The daily chart clearly shows ‘Double-top’ formation breaking crucial supports and neckline. It trades below 200-DMA, which is at Rs 1,326 level. The stock needs to rebound above the said level, otherwise, it may head towards Rs 1,200, its low touched in October last year, chart suggests.

HEG: The stock has corrected 44 per cent from its lifetime high of Rs 4,936 level. The monthly and weekly chart formed 'Double top' pattern indicating weakness and negative sentiment. The breach of Rs 2,600 may further add to the selling pressure as the stock has broken the support of Rs 3,030 level. The technical indicator RSI (Relative Strength Index) is trading in the oversold region while MACD (moving average convergence and divergence) is trading below the zero line with negative crossover.

Graphite India: The stock is trading below its 100-DMA on the weekly chart of Rs 637.60. The monthly chart formed 'Head and Shoulder' pattern on the closing basis. The next support level comes in at Rs 500, where the buying was witnessed earlier, the chart suggests. 

Ultratech Cement: The daily chart shows a breakdown in the descending triangle. The scrip has broken the support of 200-DMA on the weekly time frame of Rs 3,621 level. A breach of 3,480, continuous trade below the said level may further weaken the stock. It has to rebound above Rs 3,621 – 3,650 levels to regain the strength, indicated by RSI (Relative Strength Index), which has entered the oversold region of 30 levels as per daily chart.