By Subash Gangadharan
On the daily chart, Nifty has been making lower tops and lower bottoms for the last few sessions. But on Wednesday, Nifty was able to break out of the recent trading range convincingly.
Technical indicators too are supporting the Nifty as the index continues to hold above the 50 day SMA and Wednesday’s bounce back has also led to the Nifty convincingly closing above the 20 day SMA. 14-day RSI too has bounced back and crossed its 9-day EMA, which is encouraging. The index could now attempt to test its life highs of 22127 in the coming sessions.
The below picks are for the next 15-26 trading sessions
Buy Tata Steel
Tata Steel remains in an intermediate uptrend for the last several months. The stock recently corrected from a high of 147.4 and found support near the 50 day SMA at 135.
With the bounce back seen on Wednesday accompanied with a pick up in momentum readings like the 14-day RSI, the uptrend looks set to continue. Buy between 139 and 143. CMP is 141.4. Stop loss is at 135 and upside target is at 150.
Buy TVS Motors
TVS Motors has been consolidating in a tight range for the last few weeks after bouncing back from the 50 day SMA at 1938. This week, the stock has broken out of its recent range on the back of healthy volumes and has closed just below its current life highs.
With momentum readings like the 14-day RSI in rising mode and not overbought, the uptrend looks set to continue. We recommend a buy between the 2100 and 2110 levels. CMP is Rs.2105. Stop loss is at 2020 while Target is at 2240.
(Mr. Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing)