Two stocks to buy for next one month, charts show strong support; Nifty may move higher in upcoming sessions

April 1, 2021 9:23 AM

Markets have bounced back smartly in the last few sessions after the correction seen in the Nifty from Mid February.

stocks to buy, Nifty, FinolexThe uptrend is likely to gain momentum once the Nifty crosses the recent swing high of 14879.

By Subash Gangadharan

Markets have bounced back smartly in the last few sessions after the correction seen in the Nifty from Mid February. On the daily chart, the Nifty has bounced back from an upward sloping trend line, thereby indicating that the intermediate uptrend is intact.

On Wednesday, the Nifty corrected after finding resistance at the previous swing high of 14879 and the 20 and 50 day SMA. However, given that Wednesday’s correction has happened after a decent rise from an upward sloping trend line, we stick with our view that the Nifty could move higher in the coming sessions.

The uptrend is likely to gain momentum once the Nifty crosses the recent swing high of 14879. In this scenario, the Nifty could once again be headed towards the life highs of 15432. Downside supports to watch for resumption of weakness are at 14617.

The below picks are for the next 15-26 trading sessions

Buy Finolex Industries

After correcting from a high of 690 touched in early March 2021, Finolex Industries found support around the 601 levels in late March 2021. These levels also coincide with the previous swing lows of the stock tested in February 2021, implying a double bottom pattern on the daily charts.

On Wednesday, the stock broke out of its recent narrow trading range of 601-624 on the back of above average volumes and also closed above the 20 and 50 day SMA. This augurs well for the uptrend to continue.

Short term momentum indicators like the 14-day RSI too are in rising mode and not overbought.

With the intermediate and long term technical setups too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 630-641 levels. CMP is 637. Stop loss is at 610 while targets are at 710.

Buy HPCL

After correcting from a high of 259 touched in late February 2021, HPCL found support around the 225 levels in late March 2021. These levels also roughly coincide with the previous swing lows of the stock tested in February 2021, implying that the 225 levels is a strong support area.

On Wednesday, the stock moved up smartly and in the process took out its recent highs and also closed above the 50 day SMA. This augurs well for the uptrend to continue.

Short term momentum indicators like the 14-day RSI too have bounced back from lower levels and are now in rising mode and not overbought.

With the intermediate and long term technical setups looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 233-238 levels. CMP is 236. Stop loss is at 228 while targets are at 260.

(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)

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