Buy HDFC Bank, Divis Lab, Tech Mahindra others, charts show short term gains; Nifty forms long bullish candle

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By Shrikant Chouhan

The bulls continued their positive momentum for the third day in a row, the NSE Nifty 50 ended up 62 points while the BSE Sensex gained 246 points. Among sectors, strong buying was seen in reality and banking stocks. Among the sector indexes, reality was the biggest gainer with almost 2.5%. Technically, the Nifty/Sensex not only broke through the short-term resistance of 16300/54500, but they also managed to close above the same, which is overall positive.

Furthermore, they are also holding a higher bottom formation and on the daily charts they have formed a long bullish candle. The short-term trading setup indicates a new uptrend from current levels. For traders, 16250/54300 would now be the decisive level of the trend. Above which the indices could evolve up to 16400-16450/55000-55200. On the other hand, below 16250/54300 the indices could slide to 16150/54000.

Technical stocks to buy

HDFC Bank
BUY, CMP: Rs 1,348.05, TARGET: Rs 1,415, SL: Rs 1,320

The stock had been in a sloping channel for the past few sessions. The recent price correction from its supply zone has sent the meter plunging towards its important support zone. As a result, the pullback rally is very likely for further near-term upside.

Divi Laboratories
BUY, CMP: Rs 3,753.25, TARGET: Rs 3,950, SL: Rs 3,670

On the daily chart, after the reversal from its support zone, the stock is in a gradual upward move in a rising channel pattern. The texture of the chart pattern suggests an upward movement from the current level to the upcoming horizon.

rain industries
BUY, CMP: Rs 152.25, TARGET: Rs 160, SL: Rs 148

On a monthly scale, after its downward movement, the counter took support on an important retracement zone. Additionally, on the daily charts, the counter gave a breakout of the symmetrical triangle chart pattern with decent volume activity, suggesting that the counter has sufficient upside potential from current levels.

Tech Mahindra
BUY, CMP: Rs 1,007.7, TARGET: Rs 1,060, SL: Rs 987

The stock has underperformed over the past few weeks and trended lower. After the sharp correction from higher levels, the stock is currently trading in a range-bound mode near its demand zone, indicating an accumulation at these lower levels. Therefore, the upward movement from the current level is likely to resume in the next few sessions.

(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Opinions expressed are those of the author.)

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