Nifty outlook & stock calls by Anand Rathi: Buy Bajaj Auto, Relaxo Footwear

The stock of Bajaj Auto has breached its short term 21-DMA which was placed at 3020, which will now act as a major resistance

BUY NIFTY | TARGET: 11,500 | STOP LOSS: 11,250

The Nifty index witnessed profit booking at higher levels and has reached the crucial support of a rising trend line which acted as a major support zone. So, as long as it respects this rising trend line, one can take a contra bet on the index with the expectation of a pullback towards 11,500 levels. The momentum indicators and oscillators on the weekly scales are still in buy mode which hints of some buying at lower levels. The volatility index “India VIX” jumped more than 25% to end near 23 levels, so caution is advised as the markets are likely to be volatile.

BUY RELAXO | TARGET: Rs 700 | STOP LOSS: Rs 640

The stock had earlier breached a multi-month downward sloping trend line on the higher side. Now, it has respected the breakout and has recovered sharply from the same. The volume has also picked up from the past couple of sessions. The momentum indicator and oscillator are on buy mode on the daily as well as a weekly scale which hints of further positive momentum in the counter.

BUY LTTS | TARGET: Rs 1,600 | STOP LOSS: Rs 1,530

The stock has formed a bullish candle and has surpassed its previous three day’s high. It is also taking the support of a rising trend line connecting all the recent lows. It is trading well above its 200-day moving averages. The momentum indicators and oscillators are very well in the buy mode on the weekly scales which hints of a further positive momentum in the counter.

SELL BAJAJ AUTO | TARGET: Rs 2,880 | STOP LOSS: Rs 3,000

The counter has formed a triple top and also provided a breakdown from a rising trend line on the daily chart. It also breached its short term 21-DMA which was placed at 3020 and now it will act as a major resistance. The RSI is making a lower top and lower bottom formation on the daily chart which hints of further weakness in the counter.

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Disclaimer: Nilesh Jain is Technical and Derivatives Research analyst at Anand Rathi Shares and Stock Brokers. He may have positions in one or all of the above mentioned stocks. Views are personal.