Stock Tips: For the last five days, Nifty is continuously reaching new highs and it is showing signs of further upside. Technically, Nifty has formed a strong bullish candle on the weekly chart. For the past few months, this benchmark index has been making higher bottoms and higher tops, due to which it is showing a bullish trend. Nifty is trading above 21 and 50 Days Weekly Exponential Moving Average which is indicating a bullish trend. It is getting support from large-cap IT, FMCG and telecom stocks.
There is no sign of Nifty going below 16800-16700 but nothing can be said for sure at the global level. Instead of panicking when Nifty falls, it should be seen as a buying opportunity. It may face resistance at the level of 17550. Investors should focus on individual stocks rather than the benchmark index and can earn up to 7 per cent profit by investing in Torrent Power, HDFC AMC and Escorts.
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Torrent Power: BUY
CMP: Rs 486 | Target Rs 516 | Stop Loss Rs 470 | Return 6%
- For the past two months, its prices were trading in a rectangular formation and it has formed a trend line resistance at the level of Rs 475.
- On August 27, Torrent Power has broken the rectangle pattern at Rs 488 level and it is showing signs of going up.
- In the daily time frame, the stock is trading above the 21, 51 and 100 day exponential moving averages which is positive for the price in the near term.
- MACD (Moving Average Convergence Divergence) is above the centerline with a positive crossover above the signal level.
- The 14 Day Momentum Oscillator RSI (Relative Strength Index) is above 60, indicating a bullish trend in the stock.
HDFC AMC: BUY
CMP: Rs 3197 | Target Rs 3390 | Stop Loss Rs 3100 | Return 6%
- Swing trade setup is visible in HDFC AMC and it can give 6 per cent returns to the investors.
A cup pattern is visible in the weekly chart ie the price setup is promising.
- Coming to the indicators, MACD (Moving Average Convergence Divergence) is showing positive crossover on the daily chart and ADX (Average Directional Movement Index) is also showing a rising trend at 19.60.
- The RSI is about to reach the overbought level, which is showing signs of bullishness in the stock.
- This stock is trading above 21 days Exponential Moving Average which is positive.
CMP: Rs 1321 | Target Rs 1415 | Stop Loss Rs 1268 | Return 7%
- The stock has been forming higher lower formations in the monthly time frame since August 2019, which is indicating a bullish trend in the long term. Its sentiment has also completed a throwback of the Daily Chart Rectangle Pattern near the trend line support.
- The 14 days RSE on the weekly chart is above 50 for the past few weeks and seems to be moving towards the overbought level. It is indicating a bullish trend.
- Investors can invest in this stock by placing a stop loss of Rs 1268 at the target price of 1415.
If this stock breaks the level of 1415, then its next target will be Rs 1450.
Bullish Trend in Bank Nifty
Talking about Bank Nifty, it has broken its consolidation band and has managed to close above the straight horizontal trend line support. On the daily time frame, the index has managed to close the 14-day RSI (Relative Strength Index) above this trend line support with a bullish crossover near 58. The 21 and 50 day exponential moving average is acting as an anchor point and if the index sees a slide from this level, then it should be seen as a buying opportunity. Resistance for Bank Nifty is visible at 37500 – 37770 and it is currently getting support at 36200 – 36000.
(Article: Rohan Patil, Technical Analyst, Bonanza Portfolio)
(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)