Adani Enterprises stock, Vedanta, Bajaj Auto; Nifty slips 226 points

Domestic stock indexes went down sharply on Wednesday thanks to negative global cues and reports of Hindenburg going short on Adani group stocks. The BSE Sensex plunged 773.69 points, or 1.27 per cent, to settle at 60,205. Nifty 50 fell 226.35 points, or 1.25 per cent, to 17,891. On traders' radars were Adani Enterprises, Vedanta and Bajaj Auto. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities, advised traders to do in Friday's trading session:

After sideways consolidation, Adani Enterprises stock has made distribution at the top and has given a breakdown of the rising trendline pattern, which indicates selling pressure in the scrip. The last three weeks prices have been falling with lower highs and lower lows, below the 20 day SMA. A momentum indicator fell below the 50 mark and made a bearish crossover. The MACD histogram hovers in negative territory with a bearish crossover, confirming short positions. One can start short positions in Adani Enterprises' February futures at around Rs 3,430 -- 3,450 or a rise in the price until Rs 3,525 can be used as a selling opportunity for the downside target of Rs 2,800. If the stock closes above the Rs 3,900 level, the bearish view will be negated.

Inverted Head and Shoulder breakout on the daily chart and ascending triangle breakout on the weekly scale is a sign of a bullish move on the scrip. The optimism is supported by the fact that the stock has been backed by decent volumes. The stock is trading above the bullish crossover of 20 and 50 day SMA, which is generally positive. It is taking a breather while making a bearish counterattack pattern on the daily chart.

It is approaching to the breakout zone which can provide an opportunity for initiating a long position in the scrip. One may buy Vedanta around Rs 320-325 levels and wait for the upside target of Rs 370 380 zone with stop-loss of Rs 295 levels on closing basis.

The stock took support near Rs 3,520 after a medium-term correction. The stock is consistently supporting in the price range of Rs 3,520 -- 3,460 after a correction. It has formed Double Bottom formation, which indicates a possibility of a quick rally from the current levels. The stock also witnessed a falling trendline breakout on the daily chart above its 20 DMA. There are buying opportunities for the positional target of Rs 4,130 with stop loss of Rs 3,460 on a closing basis.