Given the momentum with which the markets have broken out of the highs of 11374, there is a good possibility that the Nifty could now be headed towards the next major intermediate highs of 11536-11614.
By Subash Gangadharan
After correcting from a high of 11374 last week, the Nifty found support at the 11,111 levels which also roughly coincided with the 20-day SMA. The Nifty then rallied in the early part of this week from the low of 11,111 to convincingly breakout of the 11374 levels. Given the momentum with which the markets have broken out of the highs of 11374, there is a good possibility that the Nifty could now be headed towards the next major intermediate highs of 11536-11614.
Technical indicators continue to give positive signals for the short term as the Nifty continues to trade above the 20-day SMA and the 14-day RSI remains in rising mode and above its 9-day EMA. The 20-day SMA also continues to remain above the 50-day SMA, indicating that the intermediate trend remains positive (See the daily chart above).
The below picks are for the next 22 trading sessions
- Nifty likely to hit life-time high of 15,400 in May, BFSI, pharma, metal sectors may outperform
- If Nifty holds above 14,900, it may touch 15,200, Bank Nifty to remain in positive range; TCS, Airtel in focus
- Sanjiv Bhasin’s stock picks for next 5 months; sees Nifty at 15,000, Bank Nifty near 34,250 by May-end
After correcting from a high of 107.5 touched last month, GAIL found support around the 92-93 levels in early August 2020. These levels also coincide with the previous lows touched by the stock in June 2020, thereby making it a strong support.
The stock has since then rebounded and gradually moved higher, making higher tops and higher bottoms in the process. On Wednesday, the stock broke out of the 95.5-99.7 trading range on the back of huge volumes.
In the process, the stock has also closed above the 20-day and 50-day SMA, which can be considered as a positive signal. Daily and weekly momentum readings too are in rising mode and not in overbought territory.
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 99-102 levels. CMP is 101.75. Stop loss is at 97 while targets are at 112.
LIC Housing has been consolidating in a range for the last several weeks. Today, the stock broke out of the 262-273 levels on the back of above average volumes, which is encouraging.
Technical indicators are giving positive signals as the stock trades above the 20-day and 50-day SMA and the 14-day RSI is in rising mode and above its 9-day EMA. The medium term technical setup too is looking positive. We recommend a Buy between 275 and 280 with a SL at 266 and Target of 310 for 22 trading sessions. CMP is 278.5.
(Subash Gangadharan is a technical research analyst at HDFC Securities. The views expressed are the author’s own. Please consult your investment advisor before investing)