Nifty above 17200 would aim for 17550; Buy HDFC Bank, Coal India, TechM as charts show bullish trend

Nifty above 17200 would aim for 17550; Buy HDFC Bank, Coal India, TechM as charts show bullish trend

By Shrikant Chouhan

NSE Nifty 50 bounced back sharply on Tuesday, ending 509 points higher while the Sensex rallied by 1,736 points. Technically, after a sharp fall, the Nifty 50 index took the support near 200 days SMA and reversed sharply. On daily charts, the 50-stock index formed a long bullish candle indicating continuation of a pullback rally in the near term. However, in a short-term time frame, the market is still holding lower top formation and trading below the 50 day SMA which is largely negative for the index. We are of the view that benchmarks indices Nifty and BSE Sensex have completed one leg of pullback rally and now 17450/58500 and 17550/58750 would be the immediate hurdles.

Technical stocks to buy

Tech MahindraBUY, CMP: Rs 1,450.5, TARGET: Rs 1,525, SL: Rs 1,415

The stock had been in correction mode after hitting the all-time high level and thereafter it entered into an accumulation phase near its important support area. Finally, a strong reversal candlestick formation indicates the resumption of a bullish uptrend in the coming horizon.

Coal IndiaBUY, CMP: Rs 165.25, TARGET: Rs 175, SL: Rs 160

The counter is into a gradual up move with a higher low series on the daily chart. Additionally, It has formed a Cup and Handle chart pattern with a decent volume. Therefore the breakout of the range for moving further upside is very likely to occur in the near term.

Divis LaboratoriesBUY, CMP: Rs 4,340, TARGET: Rs 4,560, SL: Rs 4,240

After recovering from the lower levels the stock is trading in a range-bound movement. As a result, the formation of a Flag chart pattern on the daily scale is formed which points to bullish movement to resume in the coming horizon.

HDFC BankBUY, CMP: Rs 1,534.35, TARGET: Rs 1,620, SL: Rs 1,500

The counter is trading in a rectangular range for the last few sessions. The formation of a strong bullish candlestick pattern indicates breakout from its upper boundary of the trading range is very likely in the near term.

(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, Views expressed are the author’s own.)