Hot Stocks | Jindal Stainless, CCL Products, L&T Infotech could give up to 14% return in short term, here's why

Nifty failed to surpass the crucial resistance of 50-day EMA (exponential moving average), placed at 17,516 and ended the session at 17,385, with the loss of 0.72 percent on December 13. Nifty closed with bearish candlestick of 'Engulfing' on the daily chart. However, this fall is not enough to justify the short term bearish reversal.

The higher highs and higher lows are still intact on the short term charts. The indicators and oscillators like RSI (relative strength index), MACD (moving average convergence divergence) and DMI (directional movement index) have not shown any sign of changing the trend from bullish to bearish. However falling ADX (average directional index) has been showing sign of slowing down the momentum in the markets.

For the short-term, Nifty has got stiff resistance in the range of 17,600-17,650. Any close above this range could push Nifty towards 17,900 target. On the downside, support is seen in the range of 17,150-17,200.

Market looks very stock and sector specific. Trading opportunities can be observed in both the direction, as far as derivative stocks are placed. IT, Metal, and Capital goods are some of the sectors which look strong, while NBFC and FMCG sectors are looking weak.

Intermediate trend of the Nifty is still not certain and on the basis of the chart patterns, we cannot say that we are out of woods. Nifty has not even retraced 50 percent of the entire downswing which we saw from 18,604 (Top made on October 19, 2021) to 16,782 (Bottom made on November 29, 2021). Bearish trend gets negated, once underlying surpasses 61.8 percent Fibonacci retracement, which is placed at 17,900 odd levels.

To sum it up, we believe that Nifty has not negated the bearish developments on the intermediate charts. However, short term trend moves have been showing attempt by the Nifty to get in to the bullish zone. Confirmation of the bullish trend reversal would only come when Nifty closes above 17,900. Short term supports for the Nifty is seen at 17,150.

Traders should remain nimble-footed and vigilant while deciding on stock to buy for the trading. Risk measure should be taken properly before taking big position in the swing trading.