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Nifty outlook & stock calls by Anand Rathi: Sell BPCL, Buy Mphasis

BPCL's stock is trading below its long-term moving averages
SELL NIFTY | TARGET: 10,120 | STOP LOSS: 10,400

The NIFTY index earlier completed its 61.8 per cent retracement of the entire fall and witnessed profit booking from the same. It also faced stiff resistance at the upper rising trend line which is placed at 10,550 levels. The overall structure hints of a broader consolidation and since we have already seen a strong rally, one should refrain from creating aggressive long positions at higher levels. The momentum indicator RSI has formed a double top formation on the daily chart and showing signs of reversal from higher levels. Thus, we advise aggressive traders to initiate a short position with a strict stop loss of 10,400 and defensive traders should adopt a stock-specific approach.


The stock has breached its major neckline and is also trading below its long-term moving averages. Now, as long as it trades below 384 levels, the overall structure looks weak. The momentum oscillator MACD has also provided fresh sell crossover on the daily chart. Based on the above rationale, we may see some selling pressure in the short-term.


The stock has provided breakout from a consolidation zone and also witnessed a golden crossover on the daily chart, where 20 DMA crossed 200 DMA from low to high. The momentum indicators and oscillators are very well in 'buy' mode on the weekly scale which hints that the positive momentum is set to continue in the short-term.


The stock is respecting its rising trend line and has also formed a bullish candle on the daily chart. The momentum indicators and oscillators are very well in the 'buy' mode on the daily as well as a weekly chart. As we can see, a breakaway gap is placed near 450 levels which the stock may make an attempt to fill. 

Disclaimer: Nilesh Jain is Technical and Derivatives Research - Equity Research Analyst at Anand Rathi Shares and Stock Brokers. He may have positions in one or more stocks. Views are his own.

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