Nifty remains in an intermediate uptrend: Subash Gangadharan of HDFC Sec

Nifty has recently made higher bottoms at 14,416 and 14,591 and continues to trade above the 20 and 50-day SMA

Nifty outlook
 

On the daily chart, the Nifty index continues to hold above a rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. The Nifty has also recently made higher bottoms at 14,416 and 14,591 and continues to trade above the 20 and 50-day SMA, which gives further evidence of an uptrend. We expect the Nifty to move higher towards the lifetime highs of 15,432 and beyond in the coming sessions. Our bullish bets are off if the Nifty moves below the lows of 14,884.

Stock recommendations:

Buy ZEEL | CMP: Rs 202 | Target: Rs 230 | Stop loss: Rs 188

Rationale: ZEEL has been consistently falling in the last few weeks after testing a high of 261 in Februay 2021. The stock has found support around the 179 levels which also roughly coincides with a previous intermediate low tested in October 2020. This implies a double bottom formation on the weekly charts.  On Tuesday, the stock broke out of the 179-202 trading range on the back of healthy volumes. This augurs well for the uptrend to continue.

Technical indicators are giving positive signals as the stock is trading above the 20 and 50 day SMA. Daily momentum indicators like the 14-day RSI have bounced back from oversold levels and are in rising mode now. This augurs well for the uptrend to continue.

With the intermediate and long term technical setups too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 200-204 levels. CMP is 202. Stop loss is at 188 while targets are at 230.
 

Buy LTI | CMP: Rs 3,715 | Target: Rs 3,950 | Stop loss: Rs 3,600

LTI has recently corrected from a high of 4450 tested in April 2021. The stock has found support around the 3525 levels which also roughly coincides with a previous intermediate low. This indicates that the 3525 level is a strong support.

With the stock now gradually rising from these supports, the uptrend looks set to gain momentum in the coming sessions. The IT sector too is beginning to move higher which is another positive indication for LTI.
 

Technical indicators are giving positive signals as the stock is trading above the 200 day EMA and is now on the verge of crossing above the 20 day SMA. Daily momentum indicators like the 14-day RSI have bounced back from oversold levels and are in rising mode now.

With the intermediate technical setup too looking positive, we believe the stock has the potential to move higher in the coming weeks. We therefore recommend a Buy between the 3650-3750 levels. CMP is 3715. Stop loss is at 3600 while targets are at 3950.
Disclaimer: Subash Gangadharan isTechnical Research Analyst at HDFC securities. He or HDFC Securities Ltd. does not have any financial interest in the subject company. The analyst, currently, doesn't hold any position in the stocks.