Nifty has to hold above 15,150 to continue bullish trend; HDFC Bank among 4 technical stocks to buy

On the day of the weekly expiration of index options on Wednesday, markets could see a bullish continuation.

HDFC Bank, stocks to buy
If Nifty/Sensex fall below the level of 15000/50750, the bullish pattern would fail. Image: Reuters
By Shrikant Chouhan

The market continued to remain range bound, trading between 15150/51200 and 14900/50200 levels. However, towards the end, Nifty IT and Bank Nifty helped the broader market to move higher. To a greater extent, broad-based buying in the technology sector has helped the market to close higher compared to the financial sector. From the financial sector, private banks topped the day, while the PSU banks closed in the negative territory on Tuesday. The Nifty and Sensex have formed bullish reversal formation by closing at the highest point of the day. On the day of the weekly expiration of Index options, we could see a bullish continuation if these indices manage to hold above 15150/51200 levels. Above, 15150/51200 the market would face the biggest hurdle at 15270/51750. If the index falls below the level of 15000/50750, the bullish pattern would fail.

Technical stock picks are:-

HDFC Bank 

BUY, CMP: Rs 1,562.5, TARGET: Rs 1,640, SL: Rs 1,530

Post correction from the multiple highs of around 1630 the stock was into a sloping channel formation, eventually, it has managed to reverse from support of its 50 day SMA and formed a bullish candlestick formation on the daily chart.

Tech Mahindra

BUY, CMP: Rs 988.15, TARGET: Rs 1,040, SL: Rs 965

On the weekly chart, after the vertical rally from the lows of 460 to 1080 stock had corrected and got stuck in a broader range for few weeks and currently a breakout from its inverse head and shoulder chart pattern along with closure above 50 day SMA is evident which indicates a new leg of the uptrend from current levels.

Escorts Ltd 

BUY, CMP: Rs 1,362.6, TARGET: Rs 1,430, SL: Rs 1,335

The stock had reversed sharply with a long bullish candle from its short term trend line on the weekly chart, and is into a rising channel pattern forming a higher top and higher bottom series with incremental volume activity on the daily chart.

Ambuja Cements

BUY, CMP: Rs 291.05, TARGET: Rs 305, SL: Rs 285

The stock is comfortably trading above the upper range of the parabolic SAR indicator which indicates a strong trending up move in the stock to persist. Moreover, the structure of the stock has a bullish continuation formation with a higher bottom series on the daily chart which specifies bullish momentum to continue over a period of time.

(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)

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