Best intraday stocks to watch out for on 13-April-2023
The Nifty continued to rally for the eighth straight day and closed above the prior swing high of 17800. It also closed above the upper Bollinger Band, which indicates the move is stretched.
During the current downtrend, it is the first time that the index has managed to close above the upper Bollinger band. This 8-day counter-trend rally is one of the most impulsive in nature in recent history.
An over 870 points rally is the highest after October-November 2022 but in the shortest period. It also closed above the Anchored VWAP resistance. As the swing is eight days old, expect some pullback. Some of the leading indicators have already reached the overbought condition. Importantly, Wednesday's 98 points move with lower volume gives some element of doubt. Even the Banknifty also gained on low volume support.
Interestingly, the Open Interest is consistently declining since April 03. The PCR is at 1.39, which indicates the rally is at the matured stage. The Max Pain for tomorrow's weekly derivative expiry is at 17750. The weekly expiry will attract more volatility, and any spike will hurt the rally severely.
Wednesday's rally is primarily driven by the pharma sector. HDFC and ICICI Bank gains were the main reason for Banknifty's positive closing. The broader market index Nifty 500, is still below the prior swing high. The upside potential is limited to an 18000-100 zone maximum in the short term. All the impulsive rallies will attract pullbacks. Stay cautious on long positions with trialling stop loss. Avoid the fresh long positions.
The stock has formed the head and shoulders at the top and declined with a higher volume. The stock is trading below the key moving averages. The 20 DMA is already in the downtrend. The MACD line is about to go below the zero line, and the histogram shows a strong bearish momentum. The RSI is about to enter the bearish zone. It also declined below the Anchored VWAP. The Elder impulse system has formed a fresh bearish bar. The KST and TSI indicators are in the bearish setup. In short, the stock is on the verge of a bearish breakdown. A move below Rs 1559 is negative, and it can test Rs 1490. Maintain a stop loss at Rs 1585.
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