By Subash Gangadharan
Nifty recently bounced back from a low of 21137, which is close to the 50 day SMA. The index has since then been making higher tops and higher bottoms, indicating that the bulls are having an upper hand.
With the Budget to be announced on Thursday, markets are likely to be volatile. A convincing close above the recent swing high of 21813, would give the bulls ore control and the Nifty could then be headed towards its life highs. Crucial supports to watch for weakness are at 21448.
The below picks are for the next 15-26 trading sessions
Buy Vedanta
Vedanta has shown relative strength this week. While the Nifty has risen by 1.66% so far this week, VEDL has gained a healthy 4.4% over the same time period.
Zooming into the daily charts, we can observe that the stock has been consistently rising and making higher tops and higher bottoms over the last few weeks. And last week, the stock bounced back from the 50 day SMA and closed above the 20 day SMA. The stock is now on the verge of taking out its recent swing highs.
Momentum readings like the 14-day RSI too are in rising mode and not overbought, which implies potential for further upsides.
With the intermediate technical setup too looking favorable, we expect the stock to move up further in the coming sessions. Recommend a buy between the 273-277 levels. CMP is 275.2. Stop loss is at 250 while target is at 320.
Buy Vardhman Textiles
Vardhman is in a healthy intermediate uptrend. The stock has been consistently making higher tops and higher bottoms for the last several weeks.
Recently, the stock found support at the 20 week SMA and bounced back from there. In the process, it also broke out of its recent trading range on the back of healthy volumes.
Daily momentum indicators like the 14-day RSI too are in rising mode and not overbought, which augurs well for the uptrend to continue.
With the intermediate technical setup too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy. Buy between the 428-432 levels. CMP is 429.95. Stop loss is at 390 while target is at 480.
(Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing)