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The article, a snippet of an expert's analysis, delves into the current stock market situation, focusing on the Nifty index and providing specific recommendations for trading NMDC and BHEL. The author, Vinay Rajani, highlights the bearish trend in the Nifty, citing weak momentum and continuous selling pressure. He identifies key support levels at 23,800 and 23,500, the latter being the 200-day exponential moving average. Resistance is identified at 24,100, with any decisive close above this level potentially signaling a trend reversal. The article emphasizes the need for traders to track these support and resistance levels for informed decision-making.
Rajani also ventures into sector-specific analysis, advocating a bullish stance on NMDC, a metal stock performing well despite the overall bearish market trend. He cites a breakout on the weekly chart and suggests initiating a long position around 230, with a target of 240 and a stop loss at 228. This recommendation stems from the strong performance of the metal sector and NMDC's particular strength on the weekly chart.
In contrast, Rajani advises a bearish approach to BHEL, a PSU capital goods stock, citing the bearish trend in the capital goods segment and a resumption of downtrend for BHEL. He recommends a short position in cash segment at 230 with a stop loss of 4 rupees, targeting an 8-10 rupee downside. This recommendation, however, does not take into account a potential investor perspective, highlighting the article's focus on short-term trading rather than long-term investment strategies.
Finally, the article briefly touches upon Reliance, a large-cap stock, suggesting that while it has fallen by over 20% from its high, it is not a time to sell. Instead, investors can consider accumulating the stock in a phased manner, taking advantage of its potential to generate alpha despite the downtrend. This recommendation underscores the article's goal to provide trading advice based on short-term market dynamics, rather than comprehensive investment strategies.