Top five trading strategies in a falling market for coming week

By Mitesh Thacker

The Nifty opened on a subdued note and traded with the downward bias throughout the week. It recorded a high of 5989.40 levels.

Selling activity was intensified in the later part of the sessions which led the index to witness lows of 5811.10 levels. The index finally closed at 5833.20 with a loss of 178.90 points or nearly 3 per cent for the week ended 27 September.

During the week the Nifty witnessed choppy trading sessions due to an expiry week. Last few days' sideways momentum has taken the shape of a complex head and shoulder pattern.

Going forward, the Nifty has immediate support around 5,800 levels and a close below which the Nifty can plunge up to the levels of 5750/5630. On the upside the Nifty has resistance in the range of 5920 - 5950 levels followed by 6000 levels.

Here is a list of top five trading strategies for the coming week:-

State Bank of India: 'SELL' for a target of Rs 1,590 keeping a stop loss of Rs 1,688.60

The share price of SBI has been trading in a sideways range for the past couple of days after registering pull back up to the highs of Rs 1,844.50 levels. This sideways consolidation has taken a shape of a head and shoulder pattern.

With Friday's up move, the stock has registered breakdown from the said pattern. The stock has been also trading below its cluster of moving averages. The momentum indicators are also falling. This adds further strength to the bearish argument.

Traders can create short position now and again on rise with a stop placed above Rs 1,688.60 levels, for the targets of Rs 1,590/1550 levels.

Aurobindo Pharma Ltd: 'BUY' for a target of Rs 210, keeping stop loss at Rs 193.80

On the weekly chart the share price of Aurobindo Pharma has been finding resistance from its downward sloping trend line for the past couple of weeks.

With Friday's up move the stock has registered a breakout from this trend line (as shown in the chart). The stock is also finding support from its near term moving average. The momentum indicators are also trading in a bullish zone.

Thus traders can look to buy now and again on dips with a stop loss placed below Rs 193.80 levels for the targets of Rs 210/218.

Kotak Mahindra Bank Ltd: 'SELL' for a target of Rs 660, keeping stop loss at Rs 700.2

The price of Kotak Bank has been trading in an intermediate bull trend for a couple of years. In the month of July 2013 the stock had registered breakdown from this up trend. Since then stock pulled back and retested the resistance trend line.

In this week the stock has registered breakdown from the support trend line (as shown in the chart). Traders should also note that the stock has also closed below its 200 days moving average. The momentum indicator is also witnessing fresh breakdown.

Traders can create short position now with a stop placed above Rs 700.20 levels, for the targets of Rs 660/640 levels.