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Trading Strategies: Cairn India, Federal Bank and GAIL India

Mudit Goyal/Mumbai 08 Feb 13 | 08:25 AM

Nifty
Last close: 5939


Markets remained under selling pressure since morning of Thursday trade, ended to its lowest close in one and half months due to major selling was witnessed in banking stock, after government estimates showed India's FY13 growth could be worse than expected. Technically, Nifty is continuously trading in lower highs and lower lows sort of downward sloping channel on daily charts. On Thursday, Nifty has broken its medium term moving average (50EMA) which also suggests some correction in coming days. Nifty is likely to seek support around 5895-5870 and on the other side, may face resistance around 5980-6010 on Friday.

CAIRN (SHORT)
Last close: Rs 320.05
Target: Rs 312-308


Stock ahs complete the “M" formation on daily charts and moving sideways in range of 320-330 levels from past few days. On Thursday, it went down by over 1% and clears the indication for further downside so one can initiate short for the downside target of 312-308 with SL of 325.

FEDERALBK (LONG)
Last close: Rs 517.35
Target: Rs 530-536


Stock has given a decent upside rally from 440 to 550 levels and has witnessed a healthy correction upto 490 levels. It started moving higher while trading in higher highs and higher lows on daily charts which are bullish in nature. Buy this stock for the upside target of 530-536 levels with SL of 510.

GAIL (SHORT)
Last close: Rs 335.45
Target: Rs 325-320


It was forming the “head and Shoulder" pattern on daily charts which took around two months to form so the potential of downside is quite strong. As per the charts, it is trading below its 200EMA which also gives the negative outlook for the stock. There is no as such neckline breakdown but its consolidation indicates that there will be a strong downside in near term. Sell this stock for the downside target of 325-320 with SL of 341.

IFCI (SHORT)
Last close: Rs 34.25
Target: Rs 32.50-31


Stock is forming the “Head and Shoulder" pattern on daily charts which is bearish in nature. On Thursday, Stock went down over 25 conclusively breached its 200 EMA on daily charts so we anticipate that selling momentum can continue for coming days which suggest the downside target of 32.50-31 with SL of 35.20

RELINFRA (SHORT)
Last close: Rs 500.15
Target: Rs 485-480


Stock has given the neckline breakdown of head and Shoulder pattern on Thursday trade with high volume and also broken its 200EMA on daily chats which is bearish in nature so one can initiate short for the downside target of 485-480 levels with SL of 504.

Author is technical analyst with SMC Global Securities

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