Hindustan Copper (₹97.95)
Breaks down from range
The stock of Hindustan Copper was trading in the range of ₹110-140 between September 2021 and early May this year. As selling pressure increased before a couple of weeks, the scrip slipped below the lower end of the range i.e., ₹110, turning the outlook bearish.
Going forward, the stock will most likely decline towards the nearest notable support at ₹70. But before that, it could appreciate and retest the support-turned-resistance level of ₹110. Therefore, one can consider initiating short in two legs. That is, go short at the current level of ₹98 and add more shorts when the price rallies to ₹108 so that the average selling price would be ₹103. Place initial stop-loss at ₹114 and tighten it to ₹98 when the price drops below ₹85. Liquidate all the short when the stock touches ₹70.
JSW Steel (₹548.4)
Bears gaining traction
The third attempt to break out of the resistance at ₹770 in April went in vain for the stock of JSW Steel. But unlike the first two, this time the stock has witnessed a sharp sell-off and it has formed a lower low. The price action hints at further depreciation in the coming weeks.
While there could be a corrective rally to ₹600 from here, the scrip will eventually turn downwards and is expected to drop below the support at ₹500. We forecast it to decline to ₹425 in a month or two. So, traders can short the stock now i.e., at ₹548 and short again if the price rises to ₹600. Therefore, the average selling price will be around ₹574. Keep initial stop-loss at ₹650 and move it down to ₹560 when the price goes below ₹500. Exit completely at ₹425.
Oberoi Realty (₹756.45)
Breaches a key support
After hitting a record high of ₹1,051.90 in November last year, the stock of Oberoi Realty lost traction and was unable to extend the rally. It then started to move in a sideways trend, largely between ₹800 and ₹1,000. But last week, the scrip broke below the range, and this has turned the short-term outlook bearish for the stock. The nearest support is at ₹610 and a decline to this level looks inevitable, although there could be a corrective move to ₹820 before dropping towards ₹610.
Considering these factors, traders can short the stock at current levels and accumulate shorts when it appreciates to ₹820. The average selling price would thus be around ₹792. Keep stop-loss at ₹870. Alter it to ₹760 when the price declines below ₹660. Exit the shorts at ₹610 as it is a strong support.