By Subash Gangadharan
Technically, with the Nifty bouncing back strongly right after the current correction, the bulls appear to have produced a comeback. Zooming into the everyday charts, we can see that the index is holding above the prior intermediate highs of 14754. We can for that reason see the alter of polarity principle at work. Previous resistances are now acting as help.
On the 15-minute intra charts, the Nifty has reversed its current downtrend by convincingly crossing its current intraday swing highs. Further upsides are probably as soon as the quick resistance of 15010 is cleared.
In this situation the Nifty could once again try to move towards its life highs of 15432. Downside supports to watch for resumption of weakness are now at 14723.
The beneath picks are for the next 15-26 trading sessions
Buy Rain Industries
After correcting from a higher of 475 touched in January 2018, Rain Industries identified help about the 44 levels in March 2020. These levels roughly correspond to prior important highs of the stock tested in 2015, implying the alter in polarity principle at work.
The stock has given that then rebounded and steadily produced larger tops and larger bottoms more than the final numerous months. On Wednesday, the stock broke out of its current intermediate highs of 156.6 on the back of healthier volumes, indicating that the uptrend appears set to continue.
Technical indicators are providing positive signals as the stock is trading above the 20 and 50 day SMA and medium term momentum indicators like the 14-week RSI are in increasing mode and not exceptionally overbought.
With the intermediate and lengthy term technical setups as well seeking positive, we think the stock has the possible to move larger in the coming weeks and for that reason propose a get among the 160-171 levels. CMP is 169. Stop loss is at 150 when targets are at 210.
Buy Aditya Birla Fashion and Retail Ltd
ABFRL has lately bounced back from the 200 day EMA and been consolidating in a variety. On Wednesday, the stock broke out of a narrow variety on the back of above-typical volumes. This augurs effectively for the uptrend to continue.
Technical indicators are providing positive signals as the stock trades above the 20-day and 50-day SMA. Intermediate momentum readings like the 14-week RSI as well are in increasing mode and not overbought.
With the quick term and intermediate technical setups seeking appealing, we count on the stock to steadily move larger in the coming weeks. We, for that reason, propose a Buy among the 178-184 levels. CMP is 182. Stop loss is at 168 when targets are at 210.
(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s personal. Please seek advice from your economic advisor prior to investing.)