Ashok Leyland, REC: 5 Nifty 500 stocks that can slip 10% from here on

AIA Engineering and Ashok Leyland look weak on the chartk, while shares of IDFC Bank and REC look ripe for an interim correction, indicate charts.

The equity markets have shown tremendous resilience in the recent trading days riding on the India growth story even as the global markets remain jittery.

The Nifty 50 has gained 1.9 per cent or 357 points in the last four trading sessions as of Wednesday, while broader Nifty 500 index has rallied 2.1 per cent in the same period. 

Despite the current bouyancy, factors such as spurt in Crude Oil prices, weakening Rupee, FII selling and the possibility of a longer-than-expected regime for high interest rates given the sticky inflation remain a worry for the markets.

Given this scenario, here are 5 stocks from the Nifty 500 that could potentially see up to 10 downside from here on. 

AIA Engineering

Last close: Rs 3,596

Downside Target: Rs 3,265

The stock is seen struggling around its short-term (20-day) moving average which stands at Rs 3,635 in the last four trading sessions. Further on the weekly chart, key momentum oscillators such as the RSI (Relative Strength Index) and the Slow Stohastic have given a negative divergence. 

Sustained trade below the 20-DMA could see the stock slip towards its 50-DMA present at Rs 3,490, below which a fall to Rs 3,265 seems likely. For now, the upside seems capped around Rs 3,720. CLICK HERE FOR THE CHART

Ashok Leyland

Last close: Rs 184.20

Downside Target: Rs 166

Ashok Leyland has been trading below its 20-DMA for the last seven trading sessions, and presently seen seeking support around the lower-end of the Bollinger Bands on the daily chart at Rs 182.

Last week, the stock ended a per cent lower on the back of heavy volumes, last seen in the Jan-Feb 2021 period. Further, given the negative stance on select momentum oscillators, the stock is likely to witness downward pressure in the near-term. On the downside, the stock could dip towards its 20-WMA (Weekly Moving Average) at Rs 166.

In case of an upmove, the stock is likely to counter stiff resistance around Rs 186. CLICK HERE FOR THE CHART

IDFC First Bank

Last close: Rs 97.60

Downside Target: Rs 89; Rs 85

Sahres of IDFC First Bank have witnessed a sharp rally, and gained nearly 30 per cent in the last 11 straight trading weeks. The stock presently trades in overbought zone both on the daily and weekly chart. 

Further, the stock has seen negative crossover on select momentum oscillators, indicating a likely pause or a corrective move here on. In case of a price retracemet, the stock could correct up to 50 - 61.8 per cent of the recent up move, thus indicating a downside target of Rs 89.20 - Rs 85.

On the upside, the stock is likely face resistance around Rs 99.50. CLICK HERE FOR THE CHART

Indiabulls Housing Finance

Last close: Rs 190

Downside Target: Rs 174

Indiabulls Housing Finance seems to be in an interim corrective mode, with its stock price down over 8 per cent from its recent peak, and now on course to test its 20-DMA at Rs 172-odd levels. 

Among the key momentum oscillators, the MACD (Moving Average Convergence-Divergence) is on the verge of turning negative. As and when that happens, the stock may experience tepid movement thereafter.  CLICK HERE FOR THE CHART

REC

Last close: Rs 234.6

Downside Target: Rs 219; Rs 210

Shares of REC seem to be taking a breather after the run-away 109 per cent surge so far this fiscal year. Among the key momentum oscillators on the weekly chart, the Slow Stochastic has already given a negative divergence, while the MACD and RSI too seem to be converging for a likely negative crossover.

The stock is presently testing support at its 20-DMA at Rs 236. Break and sustained trade below the same can trigger a fall towards Rs 219 - 210 levels, shows the daily chart. CLICK HERE FOR THE CHART