Buy these two stocks with strong support on charts while Nifty reverses its short-term uptrend

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By Subash Gangadharan

Markets have reversed their short term uptrend this week. The reversal was confirmed once the recent low of 14222 was broken on Wednesday. With the Nifty now trading below the 20 day SMA and the 14 day RSI in decline mode, the technical indicators too are confirming the weakness seen in the markets.We expect the Nifty to play down towards the next support of 13707 in the coming sessions. This level coincides with the 50 day SMA. A failure to hold above this support could see the Nifty moving down further towards a trend line support at 13330. Any pullback rallies could find resistance at 14238.Buy SBI LifeSBI Life has corrected from a high of 955 and recently tested the 200-day EMA. Today, it bounced back from these supports and showed relative strength against the Nifty which is in correction mode.

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With the medium and long term technical setups looking healthy, we expect the stock to gradually move higher in the coming weeks. We, therefore, recommend a Buy between the 870-890 levels. CMP is 883. Stop loss is at 835 while targets are at 1000.

Buy Container CorporationContainer Corporation has shown relative strength this week. While the Nifty has corrected, Container Corp has bounced back from a low of 403 and gained 1.22% so far this week.

The 200 day EMA and 50 day SMA are currently providing support to the stock. With the medium and long term technical setups looking healthy, we expect the stock to gradually move higher in the coming weeks. We, therefore, recommend a Buy between the 430-436 levels. CMP is 433.9. Stop loss is at 410 while targets are at 490.

(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.)