Axis Securities suggested trading strategies for four stocks in cash and future segments in its weekly technical report. They are Tata Steel, ITC, Cipla and Ashok Leyland. The broker advised traders to sell the January futures of Tata Steel, ITC and Ashok Leyland for solid gains ahead. It advised traders to buy Cipla for 7 -- 11 per cent return in the next 3 -- 4 weeks. Here are the trading strategies of Axis Securities for the four stocks:
Axis Securities said that Cipla has broken above multiple resistances on the weekly chart that were placed in the range of Rs 1,080 -- 1,070 since September 30. The stock was a throwback to the breakout area, it said. It formed a bullish candle at the breakout zone, indicating a reversal of post profit booking. The scrip is forming a higher high-low on the daily chart. This formation indicates a positive uptrend. The weekly strength indicator RSI is above a reading of 50 mark, indicating positive momentum. The above analysis indicates an upside towards Rs 1,185 -- 1,230 levels. The holding period is 3 -- 4 weeks.
Ashok Leyland has broken below the Head and Shoulder pattern on the weekly time frame. The neckline was placed at Rs 142 level. The stock is forming a lower high-low on the weekly chart. This formation indicates a negative downtrend.
The daily and weekly strength indicator RSI is in bearish mode and the weekly RSI is below its reference line, which indicates negative momentum. The analysis shows a downside towards the Rs 130 -- 122 levels. The holding period is 3 to 4 weeks.
Tata Steel has broken below the Ascending Triangle pattern on the weekly time frame, with a strong bearish candle, indicating a negative trend. It is facing a resistance at 61.8 per cent Fibonacci retracement of a fall from Rs 139-83 placed at Rs 117, forming a resistance for a short term. The weekly strength indicator RSI has crossed below its reference line, which generated a sell signal. The above analysis indicates a downside towards Rs 95 -- 85 levels. The holding period is 3 to 4 weeks.
ITC has broken below the range bounds consolidation pattern on the weekly time frame. The stock was consolidating in the range of Rs 330 -- 360. It broke below the lower band of consolidation last week, indicating a downward trend. The stock is well placed below the 20 --, 50 -- and 100 day moving averages, indicating negative momentum. The daily strength indicator RSI is in bearish mode and the weekly RSI is below its reference line, which indicates negative momentum. The analysis shows an upside towards Rs 305 -- 295 levels. The holding period is 3 to 4 weeks.
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