Stock picks by HDFC Securities: Buy Adani Ports, Tata Communications

The Nifty has recently made higher bottoms at 14,416, 14,591, and 14,884 and continues to trade above the 20 and 50-day SMA, which gives further evidence of an uptrend

Nifty outlook
 

On the daily chart, the Nifty 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, 14,591, and 14,884 and continues to trade above the 20 and 50-day SMA, which gives further evidence of an uptrend.

While we expect the Nifty to move higher and make new life highs in the coming sessions, we also remain open to short-term corrections and price consolidations. Crucial support is at 15,374.

Stocks recommendations

Buy Adani Ports | CMP: Rs 798.5 | Stop loss: Rs 770 | Target: Rs 860

After falling from a high of 885 tested in April 2021, Adani Ports found support around the 689 levels. The stock had previously found support around these same levels in March 2021, implying that it is a strong support. The stock then consolidated in a range between the 689 and 792 levels before breaking out of this range on Tuesday, on the back of above average volumes.

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 and are in rising mode now. This augurs well for the uptrend to continue. With the intermediate technical setup looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 790-800 levels.

Buy Tata Communications | CMP: Rs 1,131.5 | Stop loss: Rs 1,080 | Target: Rs 1,240

Tata Communications has recently corrected from a high of 1,368, tested in March 2021. The stock has found support around the 1,037 levels, which also roughly coincides with a previous intermediate low. This indicates that the 1,037 level is a strong support.

With the stock now rising smartly from these supports, the uptrend looks set to gain momentum in the coming sessions. Technical indicators are giving positive signals as the stock is trading above the 20 day and 50-day SMA. Daily momentum indicators like the 14-day RSI too have bounced back from oversold levels and are in rising mode now. With the intermediate technical setup looking positive, we believe the stock has the potential to move higher in the coming weeks. We therefore recommend a Buy between the 1,110-1,135 levels.
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.