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Howdy Traders, Another Winning Week! I hope you all enjoyed another fantastic week of pre-market videos on my YouTube channel. I dissected numerous stocks and indexes, including the Nifty and Sensex expiries. The stocks analysed are performing beautifully. Plus, the index expiries performed as analysed. So, if you are eager to learn about upcoming stock picks and index breakdowns, then do not forget to hit that subscribe button bell on my YouTube channel to stay ahead of the curve!
Now, let’s get down to brass tacks and delve into today’s fantastic four. These are Asian Paints (NS:ASPN), Bajaj Finance (NS:BJFN), Reliance Industries (NS:RELI), and Tech Mahindra (NS:TEML). I have covered Reliance Industries and Bajaj Finance in the article, plus the video attached below. However, for Asian Paints and Tech Mahindra, the analysis is a bit more intricate. Thus, I have only explored them via the video. In the video, I shared my equity and option trading strategies for all.
Reliance Industries: A Potential Dead Cat Bounce:
Now Reliance Industries is a stock that I have analysed many times on my channel. In my last analysis, I cautioned traders that a fall was coming in the equity. This is as it was struggling near my previously given resistance of ₹1340. Sure enough, it could not break through, which resulted in it plummeting to the support zones I gave of ₹1260 and ₹1220. This is as on Friday it closed at ₹1205. This drop offered a big moneymaking opportunity for those who followed my analysis.
So, what’s next for Reliance Industries? Here’s the thing, folks: the stock has reached a critical support zone. Thus, if it stays above ₹1180, then there is a high likelihood of a dead cat bounce. This bounce could propel the stock up to ₹1260. If it breaks through that level, then ₹1320 becomes the next target.
How am I playing it? Since we are a hair’s breadth away from the dead cat bounce zone. I have already entered option sells in Reliance for the January series. The PE sells entered are of below ₹1200. The positions aren’t profitable yet, as I opened them near the market close. I plan to allow Reliance to establish its solid support base between ₹1180 and ₹1200. Then, as the position inches into profit territory, I will strategically scale up my holdings. Here’s the kicker: I will only use options here as it allows me to capture a much higher ROI than equity trading.
Bajaj Finance: Finding its Footing:
The last time I explored Bajaj Finance on my channel was when the stock reached my prior given resistance of ₹7260. I then said that I expected a decline to my support level of ₹6800, and guess what? On Friday, the stock hit ₹6804! This means that anyone who heeded my analysis dodged a bullet by avoiding an equity buy in the stock. This is as leading channels were awash with financial hosts recommending it as a buy. Moreover, I had shared that I will sell CE’s above ₹7260, which are now sitting pretty in big profits.
What’s the outlook for Bajaj Finance? Similar to Reliance, the stock has reached a crucial support zone. If it holds steady between ₹6750 and ₹6800, then there is a good chance of a dead cat bounce, which could take us until ₹7150. A break above that level opens the door to a target of ₹7380. On the other hand, a drop below ₹6750 could trigger a further decline to ₹6500.
How am I approaching this? For now, since the option sells were in the December expiry series, I plan to book all profits on Monday’s open. This is because I prefer to stay on the sidelines with Bajaj Finance. The stock’s current state makes it a bit too risky for options or equity trading. However, if a clear pattern emerges within the ₹6750-₹6800 range, then I might consider entering a position.
Conclusion: A Short-Term Respite?
As predicted, Reliance Industries and Bajaj Finance behaved exactly as I outlined in the YouTube videos, experiencing the anticipated decline. However, the charts are hinting at a possible reversal of fortune in the short term, with a potential dead cat bounce for savvy investors. Remember, this is a quick trade, so be ready to jump in and out if the predicted pattern materialises. I’ll be revisiting these stocks in an upcoming YouTube video to provide a fresh update. Finally, do not forget to check out the YouTube video! You won’t want to miss the analysis of Asian Paints and Tech Mahindra.
Youtube video link to the analysis of Reliance, Bajaj Finance, Tech Mahindra, and Asian Paints - https://youtu.be/rmO8kjiYPEw