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By Shrikant Chouhan
On Tuesday, the benchmark indices witnessed positive momentum. After a volatile trading session in the morning, the Nifty 50/ BSE Sensex took supports near 18100/60800 and reversed sharply. Among sectors, strong buying interest was seen in reality and metal stocks while selective private banks witnessed technical sell-off at higher levels. Technically, the index has formed a promising reversal formation near the 20 day SMA which is broadly positive. In addition, on intraday charts, it has formed a higher bottom formation that also supports further uptrend. We are of the view that, as long as the Nifty/Sensex are trading above 18200/61100 the pullback rally is likely to continue up to 18375/61700 further upside may also continue which could lift the indices up to 18450/62000. On the flip side, dismissal of 18200/61100 may increase further weakness up to 18100-18050/60800-60600.
Technical stocks to buy
The stock is trading into a rising channel pattern forming the higher top and higher bottom series continuously on the weekly scale, on the daily chart, the counter is representing a bullish continuation chart pattern, the price and volume move suggest further uptrend from the current levels.
Mahindra & Mahindra (M&M)
BUY, CMP: Rs 894.55, TARGET: Rs 940, SL: Rs 875
Post strong rally, the stock went into a gradual downward movement due to some selling pressure which resulted in a momentary pause in the uptrend however it seems that a strong reversal is possible from its important retracement zone suggesting a bullish move on the daily chart.
BUY, CMP: Rs 1343.65, TARGET: Rs 1410, SL: Rs 1310
After a recent price decline, the stock has reversed sharply its downtrend by forming a strong bullish candlestick pattern along with decent volume activity at its demand zone on the daily chart, which hints at a fresh leg of upward momentum from the current levels.
BUY, CMP: Rs 175.05, TARGET: Rs 185, SL: Rs 170
On a broader time frame, the stock had been in a strong uptrend move however the recent price correction from its supply zone has plunged the counter to its important retracement support area as a result the pullback rally is very likely for further up move in the coming sessions.
(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Views expressed are the author’s own.)