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Chart Reading: Hindalco, M&M, Vedanta, NTPC may see a downside of up to 7%

Sell stocks
When the sentiment gets hurt, it is time to look for opportunities in beaten-down stocks. Typically, in a weaker market, a bounce is capitalised for shorting opportunities. The correction might not be deeper in nature, a pullback may not lead to a negative trend; however, beaten down stocks eliminate the possibility of a trend reversal, as higher levels still hold strong hurdles. 

Having a list of stocks breaking downward in chart patterns, further helps to take a wiser trade. In a normal market, one can rely on consolidation, volumes distribution, and trend line levels to know the overall sentiment. 

Hindalco Industries (Hindalco): The weekly chart shows the formation of “Falling channel pattern” wherein the stock did try to breakout on an upper side; however, failed on follow-up buying. It needs to sustain above the trend line to rally ahead. On the daily chart, a break down below Rs 193 may see levels of Rs 180 and Rs 176. The stock is trading below all the major moving averages i.e 50-DMA (day moving average), 100 DMA, and 200 DMA. Every rise towards Rs 204 and Rs 207 may witness strong resistance. CLICK HERE TO VIEW THE CHART

NTPC (NTPC): A clear breakdown in “Flag Pattern” on the daily chart suggests more downside in the coming sessions. Only a move above Rs 138 may change the trend; however current scenario seems to resist upside move. If in case, the stock finds reversal then it needs to absorb all the selling pressure likely to arise above Rs 131, its 50 DMA. The pattern denotes “sell on rise” strategy as a trend heading towards Rs 118 as per technical charts. CLICK HERE TO VIEW THE CHART

Mahindra & Mahindra (M&M): The stock is consistently trading in a negative trend since last six months. Negative crossovers of 50 DMA and 100 DMA and 200 DMA indicating “Death Cross” have further dampened the sentiment. The immediate resistance falls at Rs 645 levels, and trend is heading towards Rs 590. A higher selling pressure arises below Rs 615. Although, RSI (Relative Strength Index) and stochastic are moving out of oversold region, nonetheless MACD (moving average convergence and divergence) is still resilient to turn up. CLICK HERE TO VIEW THE CHART

Vedanta (VEDL): It is trading below 200 DMA since last one year, a trend that indicates negative sentiment for the stock. Every rise has seen sell-off, every reversal has witnessed resistance. Two major gap down close are yet to fill. Everything is going bad for the stock and more downside is expected as per daily chart. The current trend indicates a pressure range of Rs 160 – Rs 165 and a move towards Rs 145 and Rs 140. CLICK HERE TO VIEW THE CHART

Hero MotoCorp (HEROMOTOCO): It recently made a new 52-week low of Rs 2,477. The current price is hovering around the same level and any breach of the same may trigger a fresh sell-off. On the other side, it needs to scale Rs 2,600 decisively to change the bearish sentiment. The stock is unable to gain strong volumes on consecutive positive candles. If in case, it breaches Rs 2,477, then it may see levels of Rs 2,380 and Rs 2,350, chart suggests. CLICK HERE TO VIEW THE CHART

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