Top trading ideas by HDFC Securities: Sell L&T Finance, buy M&M

Nifty outlook and technical calls by Nandish Shah, Technical & Derivatives Analyst, HDFC Securities:
 
NIFTY VIEW
 
Nifty, closes below previous low of 10140 and also below much talked about 200 dma (Currently placed at 10166 level) for the second day in the row. It also broke the support of the upward sloping trend line adjoining the bottoms of 30th June 2017 and 29th Sep 2017 yesterday. Moreover Nifty is maintaining the bearish pattern of lower tops on the daily charts, and the recent top of 10479 would act as a strong resistance for the medium term.
 

From the derivative side, FIIs’ also created net short positions in the Index Futures’ and Stock Futures’ segmetn during the last few days. Amongst the Nifty options, call writing is seen at 10200-10300 levels. On the lower side Puts have been written at 9900-1000 level.

 
Considering the evidences discussed above, our advice would be to remain bearish till Nifty closes above 10300 levels. On the lower side Nifty may find strong support in the vicinity of 9900-10000 level
 
Sell: L&T Finance
CMP: Rs 154
SL: Rs 161
Target: Rs 144
 
After making an all-time high level of 214 in the Month of Oct last year, stock has been witnessing selling pressure at higher levels and fell by 28% from the high. Stock Price currently trading below its 5,20 and 200 dma. Indicating short to medium term trend is negative. It also broke the support of the upward sloping trend line adjoining the bottoms of 05 Feb 2018 and 07 March 2018, indicating weakness in the short term.

 
Oscillators and momentum Indicators are showing weakness on weekly and monthly charts.  Therefore we recommend selling L&T finance for the downside target of 144, keeping SL at 161.
 
Buy: M&M
CMP: Rs 743
SL: Rs 721
Target: Rs 775
 
M&M reversed northwards after forming a Double Bottom around 700 levels to close above its 5 and 20 dma. This double bottom level of 700 also coincides with the 200 dma which is currently placed at 704 levels. Therefore the significance of 700 levels as a support is very high. In the recent market correction, stock price has been holding well and also holds bullish trend on the daily chart. Stock price is trading above its 20, 50, 100 and 200 DMA, which indicates bullish setup for medium to long term. Oscillators and momentum Indicators showing strength on the medium term chart. Therefore we recommend buying M&M for the upside target of 775, keeping SL of 721.

 
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.