By Subash Gangadharan
Markets have bounced back smartly in the final couple of sessions immediately after the correction noticed in the Nifty from Mid February. On the each day chart, the Nifty has bounced back from an upward sloping trend line, thereby indicating that the intermediate uptrend is intact.
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On Wednesday, the Nifty corrected immediately after locating resistance at the preceding swing higher of 14879 and the 20 and 50 day SMA. However, provided that Wednesday’s correction has occurred immediately after a decent rise from an upward sloping trend line, we stick with our view that the Nifty could move larger in the coming sessions.
The uptrend is probably to get momentum when the Nifty crosses the current swing higher of 14879. In this situation, the Nifty could when once more be headed towards the life highs of 15432. Downside supports to watch for resumption of weakness are at 14617.
The beneath picks are for the next 15-26 trading sessions
Buy Finolex Industries
After correcting from a higher of 690 touched in early March 2021, Finolex Industries located assistance about the 601 levels in late March 2021. These levels also coincide with the preceding swing lows of the stock tested in February 2021, implying a double bottom pattern on the each day charts.
On Wednesday, the stock broke out of its current narrow trading variety of 601-624 on the back of above typical volumes and also closed above the 20 and 50 day SMA. This augurs nicely for the uptrend to continue.
Short term momentum indicators like the 14-day RSI also are in increasing mode and not overbought.
With the intermediate and lengthy term technical setups also searching positive, we think the stock has the prospective to move larger in the coming weeks and for that reason propose a purchase in between the 630-641 levels. CMP is 637. Stop loss is at 610 even though targets are at 710.
Buy HPCL
After correcting from a higher of 259 touched in late February 2021, HPCL located assistance about the 225 levels in late March 2021. These levels also roughly coincide with the preceding swing lows of the stock tested in February 2021, implying that the 225 levels is a sturdy assistance location.
On Wednesday, the stock moved up smartly and in the approach took out its current highs and also closed above the 50 day SMA. This augurs nicely for the uptrend to continue.
Short term momentum indicators like the 14-day RSI also have bounced back from reduce levels and are now in increasing mode and not overbought.
With the intermediate and lengthy term technical setups searching positive, we think the stock has the prospective to move larger in the coming weeks and for that reason propose a purchase in between the 233-238 levels. CMP is 236. Stop loss is at 228 even though targets are at 260.
(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s personal. Please seek the advice of your economic advisor prior to investing.)