Buy these two stocks for near-term gains; Nifty set to scale fresh highs in coming sessions

June 03, 2021 8:28 AM

We expect the Nifty to move higher and make new life highs in the coming sessions, we also remain open to short term corrections and price consolidations. Crucial supports are at 15459-15374.

Stocks to buyOn the daily chart, the Nifty continues to hold above a rising trend line that has held the important lows of the last few months.

By Subash Gangadharan

On the daily chart, the Nifty continues to hold above a rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. The Nifty has also recently made higher bottoms at 14416, 14591 and 14884 and continues to trade above the 20 and 50 day SMA, which gives further evidence of an uptrend.

While we expect the Nifty to move higher and make new life highs in the coming sessions, we also remain open to short term corrections and price consolidations. Crucial supports are at 15459-15374.

Buy RBL Bank

After falling from a high of 274 tested in January 2021, RBL Bank found support around the 169 levels in April 2021. The stock had previously found support around these same levels in September 2020, implying that it is a strong support.

The stock then consolidated in a range between the 169 and 197 levels before breaking out of this range in May 2021 on the back of above-average volumes. On Wednesday, the stock closed above the previous intermediate highs of 219 and also above the 200 day EMA.

Other technical indicators too are giving positive signals as the stock is trading above the 20 and 50 day SMA. Weekly momentum indicators like the 14-week RSI 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 in the coming weeks and therefore recommend a buy between the 218-223 levels. CMP is 221.9. Stop-loss is at 208 while targets are at 255.

Buy Apollo Tyre

Apollo Tyre has recently corrected from a high of 261 tested in March 2021. The stock has found support around the 198 levels which also roughly coincides with a previous intermediate low. This indicates that the 198 level is a strong support.

With the stock now rising smartly from these supports and breaking out on Wednesday of a recent trading range, the uptrend looks set to gain momentum in the coming sessions.

Technical indicators are giving positive signals as the stock is trading above the 20 day and 50 day SMA. Daily momentum indicators like the 14-day RSI too have bounced back from oversold levels and are in rising mode now.

With the intermediate technical setup looking positive, we believe the stock has the potential to move higher in the coming weeks. We, therefore, recommend a Buy between the 228-233 levels. CMP is 231.1. Stop-loss is at 220 while targets are at 260.

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

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Buy these two stocks for gains while Nifty sits near crucial overhead resistance of 17500-17550
2Nifty needs to hold above 17350 for further upside, support shifts higher to 17250
3Nifty needs to move above 17550 for more upside, Bank Nifty may see buying above 36900