One Buy and One Sell Signal

Published December 11, 2018

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The market dropped considerably Thursday, and Nifty 50 (NIFTY) closed at 10488 points after a decline of 1.92 per cent. In the broader market NSE, 337 shares were up and 1454 were down while 81 remained unchanged. Nifty 50 has closed just above its support of 10440 points. This should provide some solace to the falling index. On the other hand there is resistance at 10580 in the short term which may be short lived if investors decide to take the index higher.

In contrast, our short term hausse index for NSE has fallen by 16 points from last week to close at 31 points. This implies that there are now more pessimists in the market than optimists. Surely they were taking cues from the outside and markets were replicating international trends.

Thermax Limited (THERMAX.NS) Close: 1115.75

Thermax Limited has broken through the ceiling of a falling trend channel in the medium term. In the beginning this indicates a slower falling rate initially, or the start of a more horizontal development. However, the stock has given a positive signal from an inverse head and shoulders formation by a break up through the resistance at 1063 and rising above the resistance of 1080 rupees. Further rise to price target from formation at 1248 or more is signaled.

The stock has now support at rupee 1080 and resistance at rupee 1190. The stock has rising short term momentum and positive volume balance which support the price rise. Further increase in stock price is indicated.

Investtech's outlook (one to six months): Positive

GMR Infrastructure Lim (GMRINFRA.NS) Close: 14.85

After being in a sideways trend for over a year now with resistance at 21 rupees and support at 15.30 rupees, GMR Infrastructure Limited has broken down and given a sell signal from a rectangle formation both in the medium and longer term chart. The price may fall up to 11.00 rupees or less in one to six months.

In case of a price rise, there is resistance between 16-17.70 rupees and a stop loss should be maintained above that level on the closing basis. The momentum is weak as the RSI is under 30, which is a negative sign. The stock is overall assessed as technically negative for the medium term.

Investtech's outlook (one to six months): Negative

The analyses are based on closing price as per December 10, 2018. Maintaining proper stop loss is always recommended.