Best intraday stocks to watch out for on September 29

The important technical developments on Wednesday were that the Nifty decisively closed below the 200DMA and 38.2% retracement level of the prior trend.

The Nifty finally breached its important support as defined by 200DMA on Wednesday. It has formed a gravestone doji like candle pattern, after a 7% decline from the recent top in just 9 trading sessions indicates a sharper retracement.

 The retesting of the double top breakdown was witnessed on Tuesday. The index failed to enter the Monday gap area. Now, the downside targets are open to 16640. That said, a pullback is possible, and these bounces would be just normal retracements in the downtrend. The index added another distribution day on Wednesday. With this, the total distribution day count went up to six. As the index is trading below the long-short-term averages with more than five distribution days, it is slipping to a confirmed downtrend situation. Any upside move has to sustain above the gap area or 17308. We may see several bounces, which may be selling opportunities.

Now the index is trading at six week low. The Weekly RSI is also declined below the 50 zone. The daily RSI is yet to decline below the 30 zone, which indicates some more fall is possible. Wednesday's positive divergence on hourly failed to get the confirmations for its implications. But, still, the positive divergence was intact, as it formed another parallel bottom. As the PCR declined to a near neutral zone, the downside may be limited for at least the next two days. As the September series is expiring, the volatility is normally higher. Short-coverings and rollovers will play a major role.

ITC 

The stock has broken down the rising channel with a higher volume than the previous day. It also decisively declined 2.34% below the 20DMA. The 34EMA acted as a support for the day. Currently, the 50DMA support is at 2.13% away at Rs 317.7. The MACD, KST and TSI indicators have given bearish signals. The Elder impulse system has formed a strong bearish signal. It also closed below the prior support and the prior minor low. In short, the stock has broken the key supports. A move only below Rs 324 is negative, and it can test Rs 317. Maintain a stop loss at Rs 329.5. Below Rs 317, continue with a trailing stop loss.

DRREDDY

The stock closed at a crucial resistance. The stock has decisively cleared the 20DMA and 50DMAs. For the last 37 sessions, it has been trading in the zone. Currently closed at previous minor high. The MACD has given a fresh buy signal. The RSI is above prior highs and broke the range. It entered the bullish zone. The Elder impulse system has formed a strong bullish bar. It closed above the Anchored VWAP resistance. The RS momentum has moved above the 100 zone. The Relative Strength line is rising. Volume recorded above average and highest in the recent time. In short, the stock is about to give a bullish breakout. A move above Rs 4270 is positive, and it can test Rs 4320. Maintain a stop loss at Rs 4220.