Buy these two PSU stocks for over 12% gains; Nifty’s strength may push it past 12,200 in near term

Updated: Oct 22, 2020 8:37 AM

After correcting last week and touching a low of 11661, the Nifty index has bounced back in the last one week to close near the recent highs of 12025.

On the downside, supports are holding near 11650 levels, which shows that the bulls are inherently in control.

By Subash Gangadharan

After correcting last week and touching a low of 11661, the Nifty index has bounced back in the last one week to close near the recent highs of 12025. Technical indicators too are giving positive signals for the short term as the Nifty trades above the 20-day and 50-day SMA. The 14-day RSI too is in rising mode, indicating that momentum is picking up.

Given the strength and support of the various sectors which have helped to push the Nifty index higher, there is a good possibility that the Nifty could now be headed towards the next major intermediate highs of 12247 in the near term. Any corrections are likely to find support around the 11775 levels.

Also Read: Sensex, Nifty may continue witnessing high volatility; will bears come back to haunt D-Street now?

Buy SAIL

After falling sharply and finding support at the 32 levels and making a double bottom in the process, SAIL has surged higher and resumed its uptrend. With the intermediate technical setup looking positive on the charts, this augurs well for the uptrend to continue.

Technical indicators too are giving positive signals as the stock trades above the 20-day SMA. The 14-day RSI too is in rising mode.

We therefore recommend buying SAIL between 35 and 36. CMP is 35.85. Targets are at 40, while stop loss is at 34.2.

Buy BEL
BEL has bounced back strongly from the supports of 87 in mid October 2020. These levels also provided support to the stock in May 2019, thereby making it a strong support.
 
The stock has now broken out of a three day trading range on the back of healthy volumes. With momentum readings like the 14-day RSI in rising mode and not overbought, this augurs well for the uptrend to continue.

We therefore recommend buying BEL between 90-93. CMP is 92.6. Stop loss is at 88.5, while targets are at 103.

(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed by the author are his own. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.) 

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