By Subash Gangadharan
On the daily chart, we observe that Nifty has recently bounced back from the lower end of a downward-sloping channel. So while there is a possibility of a pullback rally emerging, we must remember that the intermediate trend remains down. This intermediate downtrend will continue if the recent low of 16,850 is broken. A pullback rally is likely if the Nifty can take out the immediate resistance of 17,211. Upside targets in this scenario are at 17,328-17,459.
The below picks are for the next 15-26 trading sessions
SRF: Buy – SL: Rs 2290 – Target: Rs 2550
Paytm: Buy – SL: Rs 575 – Target: Rs 700
Paytm has recently bounced back from the support of Rs 556. The stock had previously found resistance around the same levels in January 2023. This indicates the change of polarity principle is at work, as prior resistances are now acting as supports. On Wednesday, the stock has broken out of its recent 6-day trading range on the back of above-average volumes. Momentum indicators like the 14-week RSI too are climbing higher and are not yet overbought, implying the potential for more upsides. 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 Rs 627-632 levels. CMP is Rs 625.5. Stop loss is at Rs 575 while the target is at Rs 700.
(Subash Gangadharan is Senior Technical and Derivative Analyst at HDFC