The 14-day RSI too has made a double bottom and is in a rising mode now. Upside acceleration towards the 17272 levels is likely once the Nifty takes out the immediate resistance at 17149.
Town Subash Gangadharan
Daily chart indicates Nifty has reversed its recent downtrend as it has crossed the previous swing high of 16816 and has now surged even higher. The 14-day RSI too has made a double bottom and is in a rising mode now. Upside acceleration towards the 17272 levels is likely once the Nifty takes out the immediate resistance at 17149. It is important that on any corrections the support of 16555 holds; otherwise the bears could once again gain an upper hand.
The below picks are for the next 15-26 trading sessions
Buy General Insurance Corporation of India
Target price: Rs 136
After correcting from a high of 244 touched in March 2021, GICRE found support at the 109 levels in Feb 2022. These are strong support levels as they correspond to previous intermediate lows touched in October 2020.
On Wednesday, the stock broke out of its recent 12 day trading range on the back of above-average volumes. Momentum readings like the 14-day RSI have bounced back from oversold levels and are in rising mode now.
With the intermediate technical set-up too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 121-124 levels. CMP is 122.5. Stop-loss is at 114 while the target is at 136.
Buy Ajanta Pharma
Target price: Rs 2,050
Ajanta Pharma has shown relative strength this week. While the Nifty index has gained 2.02% this week, Ajanta Pharma has gained 6.7% over the same time period. In the process, the stock has also broken out of its recent trading range on the back of above-average volumes.
Zooming into the weekly chart, we can also observe that the stock has recently bounced back from the 200 week EMA. The stock is also trading above the 20 day SMA and daily momentum indicators like the 14-day RSI too are in rising mode now, which augurs well for the uptrend to continue.
With the intermediate technical setup looking positive, we believe the stock has the potential to move higher and take out its previous intermediate highs in the coming weeks. We, therefore, recommend a buy between the 1840-1855 levels. CMP is 1847.3. Stop-loss is at 1740 while the target is at 2050.
(Subash Gangadharan is a Senior Derivative & Technical Analyst at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)