The odds do seem higher of the Nifty moving up further towards the 12900-13000 levels in the coming sessions. Short term sell offs however cannot be ruled out.
By Subash Gangadharan
After witnessing a dream rally last week, the Nifty continued to rally this week to new lifetime highs. The Nifty has been continuously moving higher since last week after finding support at the 50-day SMA and breaking out of a 3-day trading range on last Tuesday. The Nifty also remains above the 20-day and 50-day SMA and has now closed at a new life time high after clearing the recent highs of 12026. The odds therefore do seem higher of the Nifty moving up further towards the 12900-13000 levels in the coming sessions. Short term sell offs however cannot be ruled out.
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We recommend a selective buying approach in outperforming sectors with strict stop losses to control risk. Our bullish bets for the next 7 days will be off if the Nifty dives lower and moves below the recent lows of 12520. In this scenario, the downside targets would be at 12367.
The below picks are for the next 22 trading sessions
After consolidating for the last one week in a range and above the 200-day EMA, Aurobindo Pharma has broken out of the 750-800 trading range on Wednesday. The breakout came on the back of above average volumes, which indicates significant accumulation.
Technical indicators are giving positive signals as the stock trades above the 20-day and 50-day SMA. Momentum readings like the 14-day RSI too are in rising mode and not overbought.
We believe the stock is ready to continue the next leg of its underlying uptrend and has the potential to move higher in the coming weeks. We therefore recommend a Buy between the 790-816 levels. CMP is 814.45. Stop loss is at 755 while targets are at 940.
SAIL has bounced back strongly from the supports of 32 in the last few weeks. These levels also provided support to the stock in August 2020, thereby making it a strong support.
The stock has now broken out of its recent swing highs of 36.7, thereby indicating that the uptrend looks set to continue. With momentum readings like the 14-day RSI in rising mode and not overbought, it indicates potential for more upsides in the coming weeks.
We therefore recommend buying SAIL between 38-40. Stop loss is at 37, while targets are at 46.
(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s own. Please consult your investment advisor before investing)