Here is what the charts say about the shares of Dabur India, InterGlobe Aviation and Voltas
Dabur India (₹546.4)
Forms lower high
The rally that the stock of Dabur India witnessed in July and August seem to be a corrective one, as it has been rejected by the resistance band of ₹590-600. It has now fallen to ₹546 resulting in the formation of a lower high on the daily chart. Although there is a possibility for the stock to inch up to ₹565 from here, it is likely to turn southward and is expected to go down to ₹485 in the near term. But since ₹485 is a good base, there might be a bounce off this level, at least temporarily.
Considering the above factors, traders can go short on the stock now. Short more if the stock sees an uptick to ₹565, since this can only be a short-term bounce. Place initial stop-loss at ₹600. Bring it down to ₹560 when price falls below ₹525. Liquidate the shorts at ₹485.
InterGlobe Aviation (₹1,836.05)
The stock of InterGlobe Aviation has not really been trending in the past year. However, there always existed a bearish bias as the stock continued to make lower highs. Falling off a trendline resistance a fortnight ago, the price action hints at a downswing from here. This can probably drag the scrip to ₹1,530. Nevertheless, there may be a minor rally to ₹1,890 before the stock falls below ₹1,800, because ₹1,825 is a considerable support.
At the same time, a fall below ₹1,530 is less likely as the stock has rebounded several times from this support over the past couple of years. So, the ideal target for the shorts can be ₹1,530. Fresh shorts can be initiated now at around ₹1,836 and on a rally to ₹1,890. Keep stop-loss at ₹2,025 at first and tighten it to ₹1,850 when prices dip below ₹1,750.
The stock of Voltas has been falling over the past month and consequently, it broke below the lower boundary of the range of ₹930-1,050 last week. This has confirmed a bear-flag pattern on the weekly chart, hinting at further depreciation. The volume has also been increasing as price fell over the past few weeks, a strong bearish signal.
While the bear-flag indicates a possible decline to ₹535, it can be too ambitious as a target for a short position because we expect the downtrend to be arrested at ₹730, a strong support. Given the above factors, one can short the stock at the current level of ₹913 and add more shorts when price rises to ₹960. Place stop-loss at ₹1,020. When price slips below ₹800, tighten the stop-loss to ₹870. Exit all the shorts at ₹730.
Published on September 17, 2022