Market Sees Big Sell-Off, Hoping To Bottom Out

The NSE index has witnessed substantial moves downward as per our expectations. In the preceding week, the Nifty saw a major sell-off rally, and a couple of times it slumped by over 100 points in a single day. The downtrend has continued and all the vital supports have been broken. Some buying was seen from the lower end, though this seemed to be short covering. The market did not manage to hold these gains and dipped more and more. Overall, this indicates a near-term bearish scenario.

Among the sectoral indices, Banks were the most hammered. Auto and Metals crashed from their support levels. Realty tanked, while Consumer Durables and Capital Goods struggled to sustain. Mid-Caps and Small-Caps continued to make new lows. IT, though, moved sideways and was able to hold its gains.

In the last week, the Nifty has broken all its important support levels. The worst part is that it continuously remained below its 200-day EMA level (5749). Going ahead, the index may see some correction from the 5480 level. One hopes that this will be where the market bottoms out.
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Coal India | CMP - Rs 294 | Sell

Coal India, on the daily chart, topped out by posting an intraday high of Rs 386.25 as on September 17, 2012 and these levels have rarely been reached since then. The stock began an intermediate downtrend and declined to post an intraday low of Rs 342.25 as on November 12, 2012. The scrip declined from here, struggled a bit and was unable to cross its previous high but managed to register a lower high of Rs 374.85 as on December 3, 2012. The stock entered a corrective phase and posted an intraday low of Rs 291 as on March 19, 2013. It entered this phase post registering a lower high and is trading below its long-term moving average. For the last couple of weeks, the stock was trading in the range of Rs 306-293. It has given a breakdown at the lower end of the range along with a rise in volumes on an intraday basis. If it closes below the level of Rs 293, it may touch the levels of Rs 280.

Coal India could be commencing a medium-term downtrend. With the oscillators looking negative, a further downside from these levels cannot be ruled out.

Trading Pointers:

Indicators: MACD-Sell | RMI-Buy | Stochastic-Sell | ROC-Sell | RSI-Buy |
Support: 292, 280 | Resistance: 303, 311
Targets: 1st Target: 278 (4-6 weeks) | 2nd Target: 265 (10-11 weeks)  
BSE Code – 533278 | Stoploss: 318 (cls)
55-Day EMA: 298.82
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McLeod Russel India | CMP – Rs 277 | Sell

McLeod Russel India peaked at an intraday high of Rs 386.45 as on February 22, 2013 and this level has been rarely seen since. It formed a double top around the level of Rs 386. The stock launched into intermediate downtrend and declined to post an intraday low of Rs 291.55 as on April 18, 2013. It commenced a short-term uptrend and peaked by posting an intraday high of Rs 327.50 as on May 21, 2013. The scrip entered a corrective phase and posted an intraday low of Rs 291.35 as on June 3, 2013. It formed a double bottom around this level and entered a short-term uptrend and peaked by posting an intraday high of Rs 325.85 as on June 7, 2013. The stock formed a multiple top around the level of Rs 325-328.

It has given a breakout of the head and shoulder pattern on daily charts, which is bearish in nature. Therefore, one can initiate a short position for the downside target of Rs 260-247 with a stoploss of Rs 304. 

Trading Pointers:

Indicators: MACD-Sell | RMI-Buy | Stochastic-Sell | ROC-Sell | RSI-Buy |
Support: 251, 269 | Resistance: 290, 304
Targets: 1st Target: 260 (4-6 weeks) | 2nd Target: 251 (12-14 weeks)  
BSE Code – 532654 | Stoploss: 304 (cls)
55-Week EMA: 315.92
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Hathway Cable & Datacom | CMP - Rs 271 | Buy

Hathway Cable & Datacom bottomed out by posting an intraday low of Rs 165 as on June 21, 2012 and these levels have rarely been seen since. The stock launched into an intermediate uptrend to peak at an intraday high of Rs 306.80 as on December 19, 2012. It couldn’t sustain these levels for long and declined to post an intraday low of Rs 227.80 as on February 26, 2013. The scrip entered a corrective phase to form support around the zone of Rs 230-227 and saw minor consolidation around this level to form a strong base. It commenced a short-term uptrend and peaked out by posting an intraday high of Rs 302 as on May 16, 2013. It is now trading near its long-term trendline support and we therefore expect a bounceback in this stock after a consolidation.

Currently, the stock seems set to stage an upmove after a decent consolidation. With the daily and weekly picture looking better, a further upside from these levels cannot be ruled out.

Trading Pointers:

Indicators: MACD-Sell | RMI-Buy | Stochastic-Buy | ROC-Sell | RSI-Buy |
Support: 264,251 | Resistance: 281, 295
Targets: 1st Target: 290 (4-6 weeks) | 2nd Target: 305 (12-14 weeks)  
BSE Code – 533162 | Stoploss: 251 (cls)
55-Day EMA: 270.52
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CESC | CMP - Rs 342 | Buy

CESC has bottomed out by posting an intraday low of Rs 252.50 as on March 28, 2013 and these levels have rarely been seen since. The stock launched into an intermediate uptrend and registered a high of Rs 354.45 as on June 10, 2013. But it could not sustain this level for long and posted an intraday low of Rs 311.10 as on June 13, 2013. It made a double bottom around the levels of Rs 311-313 and entered into an intermediate uptrend. The scrip has made a bullish engulfing candlestick pattern as on June 24, 2013 which is a bullish pattern.

Currently, CESC seems to be on the verge of commencing a breakout of its previous top, indicating the possibility of a further upside from these levels.

Trading Pointers:

Indicators: MACD-Sell | RMI-Buy | Stochastic-Buy | ROC-Sell | RSI-Buy |
Support: 325, 318 | Resistance: 351, 365
Targets: 1st Target: 365 (4-6 weeks) | 2nd Target: 380 (12-14 weeks)  
BSE Code – 500084 | Stoploss: 318 (cls)
55-Day EMA: 318.33