Adani Transmission (₹2,523.4)
At a resistance
The stock of Adani Transmission has been on a decline since mid-September last year when it faced resistance at ₹4,200. It fell below an important level of ₹2,700 last month. Currently trading at ₹2,523, the likelihood of the downtrend extending is high. Although we might see a minor up-move to ₹2,650 from here, we expect the stock to fall to ₹2,000 eventually in two-three months.
Therefore, one can consider going short on the stock of Adani Transmission at the current level of ₹2,523. Add more shorts if there is a rally to ₹2,650. Place stop-loss at ₹2,775 initially. Modify it to ₹2,500 when the stock falls and touches ₹2,300. Further, bring the stop-loss down to ₹2,225 when price declines to ₹2,100. Liquidate all the shorts at ₹2,000.
Confirms bear-flag pattern
The stock of LTIMindtree, which witnessed a sharp fall in early December, entered into a consolidation phase in the second week of the month. Since then, it was held in the range of ₹4,250-4,460. But last week, it broke below the support thereby confirming a bear flag pattern. According to this pattern, we might see a sharp fall in the coming weeks.
Although the pattern hints at a fall to ₹3,400, the stock has a support at ₹3,850. So, this can be a safe target for the shorts. So, one can short the stock now and then more on a rally to ₹4,350. Keep the stop-loss at ₹4,500 initially. When the stock falls below ₹4,000, alter the stop-loss to ₹4,125. When the price touches ₹3,930, change the stop-loss to ₹4,025. Exit all the shorts at ₹3,850.
Tube Investments of India (₹2,705.4)
Set to retest range bottom
Since September last year, the stock of Tube Investments of India has been charting a sideways trend. It has been fluctuating in a range of ₹2,500-2,900. That said, over the past month, the stock has fallen off the upper boundary of the price band. Moreover, it has now slipped below a rising trendline support and as well as both the 20- and 50-day moving averages. This increases the chances for the stock to fall further and retest the range bottom of ₹2,500 in the near term.
Considering the above factors, traders can short the stock now and also on a rally to ₹2,760. Place stop-loss at ₹2,850 at first. Revise it down to ₹2,700 when the stock falls below ₹2,620. Further, tighten the stop-loss to ₹2,650 when the stock touches ₹2,550. Book profits at ₹2,500.
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