By Shrikant Chouhan
The benchmark indices BSE Sensex and Nifty 50 witnessed a robust rally. On Tuesday, despite tepid cues, the Nifty/Sensex held the 17640/59350 support level, and in the late afternoon, it finally cleared the intraday resistance of 17725/59630. After the intraday breakout, the Nifty/Sensex rallied over 100/400 points. Among sectors, buying was seen in Oil & Gas and IT stocks. Whereas, Reality and PSU Banks witnessed technical sell-off.
Technically, on daily charts, post reversal formation the index has formed uptrend continuation formation and on intraday charts, it has formed promising higher high and higher low series formation which clearly support further uptrend. We are of the view that 17750/59750 would be the key support level for the trend following traders. Above the same uptrend texture is likely to continue up to 17880-17900 / 60180-60300. On the flip side, below 17750/59750 may trigger quick intraday correction up to 17710/59580.
Stocks to buy
ICICI Prudential Life Insurance Company
BUY, CMP: Rs 678.9, TARGET: Rs 715, SL: Rs 665
The stock has underperformed after hitting the all-time high level and thereafter it entered into an accumulation phase near its important support area, finally, a strong reversal candlestick formation indicates resumption of a bullish uptrend in the coming horizon.
BUY, CMP: Rs 827.05, TARGET: Rs 870, SL: Rs 810
Post decline from the levels of 900 the stock went into a range-bound movement where a strong bullish activity is spotted near the multiple support zone. Additionally, the formation of a bullish Marubozu candlestick pattern with a good volume suggests a strong up move in the counter.
Tata Consultancy Services (TCS)
BUY, CMP 3833.3, TARGET 4030, SL 3750
After the strong uptrend, the counter took a breather for a few sessions with a gradual down move however recent strong reversal indicates the stock has found support in its demand zone, hence we expect the rising trend to persist from the current levels in the short term.
Hindustan Aeronautics Ltd (HAL)
BUY, CMP: Rs 1,375, TARGET: Rs 1,450, SL: Rs 1,345
After hitting the all-time high of 1486 the counter has witnessed a range bound activity for a few sessions however current range breakout with incremental volume along with the formation of strong bullish candlestick pattern indicates that the counter has enough potential for further upside from current levels.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Views expressed are the author’s own.)