Buy these two stocks for near term gains while Nifty faces resistance at 15,900

June 24, 2021 8:14 AM

The Nifty is finding resistance around the 15,900 levels as it has tested it twice in the last one week and failed to cross it.

stock market today, stocks to buyshort term correction is likely if the immediate supports of 15505-15450 are broken. (Image: REUTERS)

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 14,591, 14,884 and 15,374 and continues to trade above the 20 and 50 day SMA, which gives further evidence of an uptrend.

The Nifty is however finding resistance around the 15,900 levels as it has tested it twice in the last one week and failed to cross it. This 15,900 level could therefore cap the upsides for the near term. A short term correction is likely if the immediate supports of 15,505-15,450 are broken.

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

Buy CUB (City Union Bank)

After falling from a high of 200 tested in November 2020, CUB found support around the 150 levels in April 2021. These levels also correspond to previous intermediate highs tested in August 2020, implying the change of polarity principle is at work as prior resistances are now acting as supports.

The stock then consolidated in a range between the 150 and 180 levels for the last few months with the 50 week SMA providing support.

On Wednesday, the stock broke out of a 3 day trading range just above the 50 week SMA, implying that a fresh upmove may have just started. Daily momentum indicators like the 14-day RSI have bounced back and are in rising mode now, which augurs well for the uptrend to continue.

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 165-169 levels. CMP is 167.85. Stop loss is at 163 while targets are at 178.

Buy Siemens

Siemens has shown relative strength this week. While the Nifty has gained 0.08%, Siemens has gained 0.29% over the same period. The stock has been recently consolidating above the 50 day SMA and on Wednesday, it broke out of a 3 day trading range.

With the 50 day SMA providing support, daily momentum indicators like the 14-day RSI bouncing back from oversold levels and the intermediate technical setup too looking positive, we expect the stock to move higher in the coming sessions.

We, therefore, recommend a Buy between the 2010-2040 levels. CMP is 2030. Stop loss is at 1990 while targets are at 2110.

(Subash Gangadharan is a Senior Technical and Derivative Analyst, HDFC Securities. Views expressed are the author’s own. Please consult your financial 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
1Nifty placed at midpoint of current range; traders should stay light, focus on individual themes
2Nifty futures Open Interest at ten series low; use any correction to accumulate long positions
3F&O watch: Nifty may trade in 15,500-15,800, watch 34,500 in Bank Nifty; trading strategy for July 29 expiry