Bank of Baroda (₹169)

Correction could extend

The stock of Bank of Baroda posted a loss for the second consecutive week. Although the overall trend remains positive, we expect the correction to get extended from here — the scrip could fall to ₹130 before resuming the rally. Given this, one can consider going short. We recommend selling the stock at the current level of ₹169 and add more shorts if price sees an uptick to ₹178. Keep stop-loss at ₹188 initially and revise it to ₹165 when the stock declines to ₹152.

Thereafter, when the price touches ₹144, move the stop-loss further down to ₹156. Exit the shorts at ₹130. Because this price level is a strong support where the 61.8-per cent Fibonacci retracement of the rally since July lies. Also, note that this is a counter-trend trade plan and that carries some additional risk.

PVR (₹1,630.65)

Confirms Head & Shoulder pattern

The stock of PVR, which fell nearly 11 per cent last week, slipped below a key support at ₹1,675 which led to the confirmation of a head-and-shoulder pattern on the weekly chart. This indicates a bearish trend reversal and according to the pattern, the price might fall to ₹1,140. Therefore, we suggest shorting the stock of PVR. Traders can go short at the current level of ₹1,630.

If there is a corrective rally to ₹1,750, add more shorts and place stop-loss at ₹1,865 initially. When the price falls below the minor support at ₹1,515, alter the stop-loss to ₹1,640. Similarly, on a fall below ₹1,400, tighten the stop-loss to ₹1,525. When the stock touches ₹1,280, book 50 per cent of your shorts and then modify the stop-loss for the remaining to ₹1,400. Exit the remaining at ₹1,140.

Tata Power (₹196.9)

Breaches a support

The rally in the stock of Tata Power, which began in May 2020 by bouncing off ₹27, lost steam in October 2021 after reaching ₹250. Since then, it has largely been on a broad sideways trend between ₹205 and ₹250. But last week, the stock faced sell-off and consequently, it dropped below the support at ₹205, turning the outlook negative. The bears look strong and are likely to drag the stock to ₹142. That said, there is chance for the stock to see a corrective rally to ₹212.

So, one can short the stock now — at ₹197 and short more when price moves up to ₹212. Place initial stop-loss at ₹225. When price falls below ₹180, modify the stop-loss to ₹195. When the stock touches ₹162, liquidate one-third of the total shorts you hold. Then revise the stop-loss to ₹175 for the remaining positions and exit at ₹142

Related Topics