Nifty consolidating; shift focus to mid-, small-cap stocks: Vinay Rajani

The stock of Federal Bank has broken out from a downward sloping trend-line on the daily chart.

Nifty has been consolidating in a narrow range, which is likely to end once the range of 15,600-15,900 is violated on the either side. At present, trading opportunities are more seen in the midcap and smallcap side and focus should be more on that segment only.

Stock recommendations:

Buy Federal Bank (Rs 89.30) | Target: Rs 96 | Stop-loss: Rs 85

The stock has broken out from a downward sloping trend-line on the daily chart. A "Bullish Inverted Head and Shoulder" pattern breakout is also being seen on the daily chart. Volumes have confirmed the breakout. It has been finding support on its 50 days EMA. Besides, banking as a sector is expected to resume its primary uptrend. Indicators and oscillators have been showing strength in the current uptrend. It is placed above medium to long term moving averages, indicating bullish trend on all time frames.

Buy Aditya Birla Fashion and Retail (229) | Target: Rs 245 | Stop-loss: Rs 220

The stock has broken out from the cup and handle pattern on the weekly charts. Volumes during the breakout remained significantly higher. Fashion and Retail Stocks have started outperforming after long time. Indicators and oscillators on daily and weekly charts have turned bullish. Stock has also broken out from bullish “flag” pattern on the daily charts.

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Disclaimer: Vinay Rajani is a Senior Technical and Derivative Research Analyst at HDFC Securities. The analyst doesn't have any holding in the stock. Views are personal