Nifty Outlook
Nifty after forming a ‘Pennant’ saw another breakdown as expected. This re-confirms the overall direction and also raises a new resistance zone of Rs 8000-8025. Pullbacks if any can be used as a selling opportunity whenever the reward to risk is in favor. Even though there could be minor levels to track in between, a stronger support is only placed around Rs 7400-7450.
TATA ELXSI: BUY
Last Close: Rs 1,979
Target : Rs 2,240
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Breakout from the consolidation indicates the secular uptrend to remain intact. Tataelxsi could be accumulated with a stop Loss at Rs 1,870 for an initial target up to Rs 2,240.
M&M: SELL
Last Close: Rs 1,324
Target : Rs 1,250
M&M again saw a reversal in the form of a ‘Bearish Engulfing’ on its intermediate scale. The setup provides a short term opportunity to add shorts with a stop Loss above Rs 1,347 & a target up to Rs 1,250.
ZEE ENTERTAINMENT: SELL
Last Close: Rs 400
Target : Rs 360
Negative sector outlook & the occurrence of consecutive ‘Bearish Engulfing’ patterns re-iterate the fact that the stock has been losing strength. The setup provides a good reward to risk opportunity to create fresh shorts with a stop Loss at Rs 410 for a target up to Rs 360.
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Shubham Agarwal is a head of Quantitative Research, Motilal Oswal Securities