Buy these two stocks for gains as Nifty moves higher, near-term consolidation not ruled out

The Nifty could now be headed towards the previous swing highs of 16794 in the coming sessions.

Buy these two stocks for gains as Nifty moves higher, near-term consolidation not ruled out
Short-term weakness or consolidation is however not ruled out.

By Subash Gangadharan

On the Nifty Daily chart, we can observe that after recently touching a low of 15183, the NSE Nifty 50 has been consistently rising and making higher tops and higher bottoms over the last few weeks. This week, the Nifty crossed the recent swing high of 16276. The Nifty also comfortably trades above the 20-day and 50-day SMA and the 14-day RSI too is in rising mode and not overbought. The Nifty could now be headed towards the previous swing highs of 16794 in the coming sessions. Short-term weakness or consolidation is however not ruled out.

The below picks are for the next 15-26 trading sessions

Buy Larsen & Toubro Infotech

Larsen & Toubro Infotech has been rallying higher for the last few sessions after finding support at the 3833 levels. In the process, the stock has broken out of its recent trading range. Technical indicators are giving positive signals as the stock is trading above the 20 and 50 day SMA and momentum readings like the 14-week RSI are in rising mode.

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 between the 4400-4460 levels. CMP is 4438.6. Stop loss is at 4080 while target is at 4900.

Buy Samvardhana Motherson International

Samvardhana Motherson International has shown relative strength this week. While the Nifty index has gained 2.78% this week, Samvardhana Motherson International has gained 5.52% over the same time period. Zooming into the daily chart, we can observe that the stock has made a double bottom around the 112 levels and broken out of the recent swing highs of 125 this week. The stock is now trading above the 20-day and 50-day SMA. And momentum readings like the 14-day RSI are in rising mode and not overbought, which implies the potential for more upsides.

With the intermediate technical setup looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 124-128 levels. CMP is 126.2. Stop loss is at 120 while the target is at 136.

(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s own. Please consult your financial advisor before investing)

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

Photos