Buy Paytm and Whirlpool shares for near-term gains as Nifty enters up-trend, index may head to 16557

Buy Paytm and Whirlpool shares for near-term gains as Nifty enters up-trend, index may head to 16557

By Subash Gangadharan

On the Nifty Daily chart, we can observe that after recently touching a low of 15183, the Nifty has bounced back smartly and even taken out the previous swing high of 15863. The Nifty then corrected marginally, before again breaking out of the recent highs and convincingly closing above the 20-day SMA. This is a positive signal for the near term. The Nifty could now be headed towards the 50-day SMA at 16140 in the near term. A close above 16140 could take the Nifty even higher towards the 200-day EMA currently at 16557.

Buy Whirlpool

Whirlpool has been rallying higher for the last few weeks after finding support around the 1400 levels. On Wednesday, the stock broke out of a consolidation range on the back of healthy volumes.

Technical indicators are giving positive signals as the stock is trading above the 20 and 50-day SMA and momentum readings like the 14-week RSI are in rising mode.

With the intermediate technical setup too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 1608-1612 levels. CMP is 1610.25. Stop-loss is at 1540 while the target is at 1720.

Buy Paytm

Paytm has shown relative strength this week. While the Nifty index has gained 1.61% this week, Paytm has gained 5.33% over the same time period.

Zooming into the daily chart, we can observe that the stock has bounced back from the 20 day SMA after a recent correction. With the uptrend intact, it indicates that the stock is ready to climb higher. Daily momentum indicators like the 14-day RSI too are in rising mode and not overbought, which augurs well for the short-term uptrend to continue.

We, therefore, believe the stock has the potential to move higher and take out its previous intermediate highs in the coming weeks. We recommend a buy between the 690-694 levels. CMP is 692. Stop-loss is at 640 while the target is at 770.

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