Stock Talk| Why Bharat Forge, IndusInd, Laurus Labs Fut are a short-term Sell

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IndusInd Bank is on the verge of a major breakdown from its previous multiple support zones. What is worrying is that the stock has seen rising volumes in the current downtrend, confirming the weakness.

Kunal Shah

June 17, 2022 / 08:09 AM IST

The benchmark Nifty50 has witnessed a major breakdown on June 16 after the FOMC outcome, with the index falling near the next level of 15,300. Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities tells Moneycontrol, that if this fails to sustain, there could be more pain as we may witness a further slide to 15,000-14,800 levels. According to Kunal Shah, the upside resistance is pinned at 15,800, where aggressive Call writing has been witnessed. Any close above this level will imply resumption of the uptrend.

On Bank Nifty, according to Kunal, bears took full control and triggered a breakdown that resulted in a triangle pattern on daily charts. The index remained a sell-on-rise with immediate resistance at 33,500 levels. The downside of the breakdown pattern is at 31,000-30,500 levels.

Here are three Sell calls from Kunal Shah for next 2-3 weeks:

Lauras Labs Futures: Sell | LTP: Rs 492.55 | Stop-Loss: Rs 540 | Target: Rs 450-440 | Return: 9-11 percent

The stock has witnessed a breakdown from a ‘rising trendline’ on the daily charts, and is trading below its 200-day moving average (DMA) with multiple resistances on the upside. Even the momentum oscillators are in a bearish zone, which confirms the internal weakness in the stock.

Bharat Forge Futures: Sell | LTP: Rs 626.25 | Stop-Loss: Rs 660 | Target: Rs 600-590 | Return: 4-6 percent

The stock is in a downtrend with ‘lower high, lower low’ formation intact on the daily chart. The relative strength index (RSI) indicator has given a bearish crossover, indicating further weakness in the stock.

The stock is likely to test its support zone of Rs 600-590 on the downside.

IndusInd Bank Futures: Sell | LTP: Rs 807.65 | Stop-Loss: Rs 860 | Target: Rs 750-730 | Return: 7-10 percent

The stock is on the verge of a major breakdown below the previous support zones. What is worrying is that the stock has seen rising volumes in the current downtrend, confirming the weakness. This is likely to persist in the short-term, with all the leading indicators showing a bearish crossover.

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Kunal Shah is the Senior Technical and Derivative Analyst at LKP Securities. He has over 9 years of experience in the field of derivative markets. He is an MBA graduate with specializations in finance.