Share markets still in firm uptrend; charts suggest strong support for these two stocks

July 23, 2020 8:36 AM

After rallying for five consecutive sessions, the Nifty corrected On Wednesday from a high of 11238. The Nifty nevertheless remains in a firm uptrend after holding above the 200-day EMA last week.

Nifty could now attempt to target the next major intermediate resistances at 11342-11433.

By Subash Gangadharan

After rallying for five consecutive sessions, the Nifty corrected On Wednesday from a high of 11238. The Nifty nevertheless remains in a firm uptrend after holding above the 200-day EMA last week. The index could now attempt to target the next major intermediate resistances at 11342-11433. On the downside, crucial support to watch for reversal of the current intermediate uptrend is at 10562.

Buy Federal Bank (CMP is Rs.56.9)
Target: 71
Stop Loss: 50

After falling sharply for several weeks and testing the intermediate supports of 35 in March 2020, Federal Bank has bounced back smartly and gradually climbed higher, making higher tops and higher bottoms in the process. The intermediate supports of 35 were previously tested in February 2014, thereby making a double bottom pattern on the long term charts. This augurs well for the current uptrend to continue.

The higher top and higher bottom formation has also resulted in the stock making a strong support around the 50 levels which is likely to act as a base going forward. Technical indicators too are giving positive signals as the stock trades above the 20-day SMA and 50-day SMA. The 14-day RSI too is in rising mode.

We, therefore, recommend buying Federal Bank between 55 and 57. Targets are at 71, while stop loss is at 50.

Buy PVR (CMP is Rs.1103)
Target: 1315
Stop Loss: 1021

After bouncing back sharply from a low of 705 and then consolidating in a range between the 957-1068 levels, PVR broke out of this range today on the back of huge volumes. Technical indicators too are giving positive signals as the stock trades above the 20-day SMA and 50-day SMA. The 14-day RSI too is in rising mode.

We, therefore, recommend buying PVR between 1068 and 1105. Targets are at 1315, while stop loss is at 1021.

(Subash Gangadharan, is a Technical Research Analyst at HDFC Securities. The views expressed are the author’s own. Financial Express Online does not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)

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