Benchmark BSE Sensex gained nearly 750 points last week and hit its fresh 52-week high 28,581.58 on Friday. The Nifty 50 advanced 237.10 points or 2.77 per cent to 8,809.65 on September 2. The index was trading at 8572.55 on August 26. In the Nifty 50-index, Tata Motors, Hero MotoCorp, UltraTech Cement and Tata Motors DVR advanced 9.08 percent, 8.14 percent, 7.16 percent and 6.80 percent, respectively, for the week ended September 2, 2016. However, Idea Cellular, Bharti Airtel, BHEL, BPCL and Reliance Industries slipped by 10.22 percent, 7.76 percent, 2.69 percent, 1.63 percent and 1.45 percent, respectively, during the week gone by. Chandan Taparia, derivatives analyst, equity research, Anand Rathi Financial Services said, “On daily chart Nifty formed a Spinning Top candle while on weekly chart it formed a Strong Bullish (White) candle by engulfing the price movement of last five weeks. Daily candle indicates a range bound move while weekly candle indicates fresh leg of rally so in combine to both trend may remain intact to positive with buy on decline for the next move towards its new life time high territory.”
Below are three technical calls by Milan Vaishnav, CMT, consultant technical analyst at Gemstone Equity Research and Advisory Services
Godrej Consumer Products
Why Buy: We recommend a “Buy” on Godrej Consumer Products. The stock retraced after forming a high of 1670 and has been in intermediate downtrend. It has been oscillating between its 50DMA and 100DMA past couple of days and has attempted a reversal again after forming a “Bullish Harami” pattern on Candles. The RSI is bullish being at highest point in last 14-periods and the MACD stands bullish as well. The stock can be bought above 1580 with short term targets of 1675.
Mahindra & Mahindra
Why Buy: We recommend a ‘Buy’ on M&M. The stock has been trading in a sideways channel after forming its recent high. The stock has been in trading channel moving sideways. The RSI and other lead indicators have signaled buoyant trend to continue as RSI is bullish at recent 14-period high and MACD reporting a positive crossover. The stock can bought above 1482 with short term target of 1565.
Why Buy: After retracing from 855 levels the stock has attempted to reverse by forming a higher low at 746 levels. The reversal is attempted by forming a ‘long lower shadow’ and a bullish hammer-like formation. The MACD is likely to report a positive crossover in coming days and the RSI stands at its 14-period high and reports Bullish Divergence. The stock can be bought above 788 with short term target of 835.