On the daily chart, the Nifty has recently made higher bottoms at 16565, 17055 and 17254 and continues to trade above an upward sloping 20 and 50 day SMA, which gives evidence that the intermediate uptrend is intact.
By Subash Gangadharan
Nifty has recently corrected from a high of 17793 seen last Friday. The index however found support at lower levels and managed to hold above the crucial short term trend reversal levels of 17254. The bounce-back seen on Tuesday led to the Nifty closing above the 20 and 50 period MA on the 15 min chart, indicating that the very near term trend has turned positive.
On the daily chart, the Nifty has recently made higher bottoms at 16565, 17055 and 17254 and continues to trade above an upward sloping 20 and 50 day SMA, which gives evidence that the intermediate uptrend is intact. The Nifty could now attempt to retest its current life highs of 17793 in the coming sessions.
The below picks are for the next 15-26 trading sessions
Buy Apollo Tyres
Apollo Tyres has shown relative strength this week. While the Nifty index has lost marginally, this stock has surged higher by 3.94%. In the process, the stock has also broken out of its recent trading range on the back of above-average volumes.
Technical indicators are giving positive signals as the stock trades above the 20 and 50 day SMA. Daily momentum indicators like the 14-day RSI too have bounced back and are in rising mode now, which augurs well for the uptrend to continue.
With the intermediate technical setup looking positive, we believe the stock has the potential to move higher and take out its previous intermediate highs in the coming weeks and therefore recommend a buy between the 230-234 levels. CMP is 232.4. Stop-loss is at 214 while targets are at 274.
Buy Kiri Industries
After correcting from a high of 679 touched in June 2021, Kiri Industries found support at the 461 levels in August 2021. These levels correspond to the previous intermediate lows of the stock tested in June 2021, thereby making it strong support.
The stock has bounced back well in the last few weeks from these supports and has made a higher bottom. The stock is trading above the 20 and 50 day SMA and momentum readings like the 14-day RSI too are in rising mode, which is encouraging.
With the intermediate and long term 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 536-541 levels. CMP is 538.95. Stop-loss is at 495 while targets are at 640.
(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)