Buy ITC, IndusInd Bank, HDFC Life stocks for short term gains; the chart shows the positive short-term market trend


By Shrikant Chouhan

Benchmarks continued their positive momentum, with the Nifty finishing up 178 points while the Sensex was up 549 points. Among sectors, all major sector indices traded in the green, but the PSU Bank index outperformed, up nearly 4%. Technically, against the backdrop of strong global signals, our market opened with a rising gap and the whole day hovered around the 50-day SMA (simple moving average) level. We are of the opinion that the short-term texture of the market is positive and now 50-day SMA or 17525 and 59150 would act as a key resistance zone for the Nifty and Sensex respectively.

For traders following the trend, 17525 for Nifty and 59150 for Sensex would be the next breakout levels. Above which, Nifty and could move up to 17600-17650 and 59400-59500 respectively. On the other hand, a quick intraday correction is possible if the indices break above the support levels of 17435 and 58750 respectively. Below that, Nifty could slip to 17350, and Sensex to 58500.

IndusInd Bank: BUY
CMP: Rs 1223.25 | Objective: Rs 1280 | SL: 1190

On the daily charts, the counter gave a breakout of the symmetrical triangle chart pattern with decent volume activity. The pattern suggests that the counter has enough potential for further upside from current levels.

CMP: Rs 531.25 | Objective: Rs 560 | SL: Rs 520

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.

LIC Housing Finance: BUY
CMP: Rs 415.15 | Objective: Rs 435 | SL: Rs 405

Over a larger period, the counter consolidates in a range-bound mode. Additionally, the bullish activity on the daily charts near its upper trading range boundary indicates that the meter may begin its fresh rise from current levels.

CMP: Rs 340.3 | Objective: Rs 358 | SL: Rs 332

For the past few sessions, the counter has been stuck in a range related move and currently we have seen a range breakout. In addition, the close above its short-term moving averages suggests that the stock has good resistance to continue its rise.

(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, Opinions expressed are those of the author. Please consult your financial advisor before investing)


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