Nifty outlook and stock pick by HDFC Securities: Buy SBI Life, JK Cements

Nifty in continuation of a consolidation; Breakout above 10,410; Breakdown below 10,200

For the last four sessions, Nifty has fallen into the narrow consolidation range of 10,200 and 10,400. Primary trend has been bullish as Nifty is placed above 10, 20,50 and 100 days EMA. The chances of breaking out looks much higher than breaking down as oscillators and indicators are showing strength in the trend. However, it would be advisable to protect long positions in the Nifty with 10,200 stoploss. Above 10,410, Nifty could move towards 10,600 odd levels.

Stock recommendation:

BUY SBI LIFE (809) | Target: Rs 855 | Stop-loss: Rs 780
 

There was a bullish move in the life insurance company at the end of the June month. SBI life rose almost 3% with significant jump in volumes. Stock has also seen long build up in the derivative side. Stock price has broken out from downward sloping trend line on the daily charts. Indicators and Oscillators have also been showing strength.

BUY JK CEMENT (1366) | Target: Rs 1,450 | Stop-loss: Rs 1,300
 

Most of the cement companies have been posting strong quarterly numbers and same has been reflecting positively on the stock charts. JK cement has outperformed with a huge margin in the month of June 2020. Stock has been consolidating for last 7 sessions with dry volumes, which is a good sign. The stock is likely to resume its uptrend by breaking out from the “Flag” pattern.

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Disclaimer: Vinay Rajani is Technical Research Analyst at HDFC securities. Views expressed are personal.