Technical check on a couple of stocks

Watch the chart pattern of Grasim Industries closely. The stock that began a head and shoulder pattern from may 09 finally broke its neckline at 2700 and corrected all the way upto 2100 in mid October, whereby it has found intermediate support to enter into a bear flag which is currently under progress. We expect the stock to stay range bound between 2400-2500 through the month of December until it gives a breakout below 2400 on strong volumes which would confirm a bearish continuation pattern. We would be closely watching this counter to initiate appropriate trading moves as and when the pattern plays itself out. For aggressive traders, one may short the stock even at current levels with a stop loss at 2600 for a target of 1800.Traders may book partial profits at 2100 which would be 50% of the targeted decline.


Fig 2 given below is the chart of nagarjuna construction which is presently looking weak and might present an interesting shorting opportunity in the near term. The stock has made a partial rise on its third attempt to scale the resistance trend line and with overhead supply preventing the stock from breaking through, it had to retrace to levels of 150 as on Friday’s closing. The stock clearly is headed down and might give a decisive breakout from its wedge formation if it closes below 145 which acts as the trendline support level. Traders may short the stock placing a stop loss at 158 for a first target of 145 and then 120 in the medium term. Stochastic indicators like relative strength index, price volume trend, moving average crossover, accumulation distribution line are looking weak. The stock has also closed below its lower Bollinger band at 157. Trade well.