Nifty has to cross 15,350 to resume bullish trend; ICICI Bank, Tata Motors among 4 technical stocks to buy
By Shrikant Chouhan
On Tuesday, Indian equity benchmark index turned volatile after the specific announcement on the Loan Moratorium from the Supreme Court. It has helped the Bank Nifty to recover from the lower levels. The formation of a double bottom at 33350 in the Bank Nifty worked positively. Most stocks are at their large support area. Some stocks have formed a bullish reversal pattern today. For example, Axis Bank, ICICI Bank and SBIN are at support levels and have formed reversal formations. In the next few days, we will see an upward activity in the Bank Nifty. Furthermore, if you look at the yield on long-term bonds, it is also declining. The Bank Nifty is expected to move closer to 35,000. Maintain a stop loss of 33850. On a daily chart the 50-day moving average was a major hurdle for the market and is positive for the medium-term trend of the market.
Technical stock picks are:
Aurobindo Pharma
BUY, CMP: Rs 846.15, TARGET: Rs 890, SL: Rs 825
Post correction from the highs of around 1000 which had been the supply zone for the stock, it went into a sloping channel formation, ultimately with incremental volume activity the stock formed double bottom chart pattern and retreated from the lower levels for fresh leg of uptrend.
ICICI Bank
BUY, CMP: Rs 511.1, TARGET: Rs 535, SL: Rs 500
On the weekly scale, the stock has formed bullish continuation chart pattern however from last few weeks some corrective formations were spotted due to weakness in broader market but eventually the stock have found support at its important Fibonacci retracement area with modest volume action indicating rebound in the near term.
Tata Motors
BUY, CMP: Rs 307.4, TARGET: Rs 325, SL: Rs 299
The stock has presented a robust rally from lows of 100 to 350 in six months’ time frame, and on monthly scale the trend of the stock is still in to the upward direction. It has formed higher high and higher low chart pattern. However the recent price correction has led the stock to form a double bottom near its bullish gap zone hence we expect revival of upward movement from the important support zone in the coming time horizon.
Birla Corporation Ltd
BUY, CMP: Rs 849.4, TARGET: Rs 890, SL: Rs 830
Post recent run up from 700 to 900 the stock entered into the distribution phase and corrected a bit to its support zone. However, on the daily chart the stock has formed higher bottom series formation with strong bullish candlestick pattern along with positive SAR series which can lift the stock to its previous highs hence we expect bullish momentum in stock likely to continue in the near term.
(Shrikant Chouhan is the Executive Vice President, Equity Technical Research at Kotak Securities. Views expressed are the author’s own.)
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