Breakout from 17,500-18,100 zone to give direction to Nifty: Vinay Rajani

Among individual stocks, the technical analyst from HDFC Securities recommends to buy Cochin Shipyard and PSP Projects.

Nifty View

From the day's high of 17,919, the Nifty witnessed profit booking and fell more than 130 points towards 17,780.

The short-term support for the Nifty is seen at 17,500-odd levels, which happens to be 34-day EMA. Resistance for Nifty is seen at 18,100-odd level. For the last 6 weeks, the Nifty has been in tight consolidation zone. Breakout from 17,500-18,100 range would give directional move in the Nifty. 

BUY

Cochin Shipyard

Buy Range: Rs 418.5 - Rs 405

Targets: Rs 450; Rs 478

Stop Loss: Rs 400

The stock price has broken out from the downward sloping trend line on the monthly charts. The stock price has also surpassed double-top resistance of Rs 410 with rising volumes.

The defense sector has been outperforming for last couple of months. Further, the stock is placed above all important moving averages, indicating bullish trend on all time frames. Indicators and Oscillators like RSI and MACD have been showing strength in the current uptrend.

BUY

PSP Projects

Buy Range: Rs 641 - Rs 615

Target: Rs 700

Stop Loss: Rs 610

The stock has broken out from the “Flag” pattern on the weekly chart. The price breakout is accompanied with jump in volumes and the stock has also broken out from the consolidation, which held for previous 3weeks.

Further, the stock is placed above its 20-, 50-, 100- and 200-DMAs, which indicates bullish trend on all time frames. Indicators and Oscillators like DMI and MACD have been showing strength in the current uptrend. 

(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC securities. Views expressed are personal).