Stock picks by Tradebulls Securities: Sell Tata Steel, Buy Axis Bank

Nifty outlook and stock recommendation by Sacchitanand Uttekar, DVP - Technical (Equity)

Nifty View

The Nifty continues to consolidate around 11,000 levels with 20 DEMA (11,123) acting as immediate resistance. Consecutive occurrences of bullish formations i.e. “Bullish Harami”, “Bullish Hammer”, and “Bullish Engulfing” around the 100 WEMA (10,775) in the previous week has stalled the downside momentum, validating the view of short-term bottom in place. Further upside momentum would be witnessed with a probable continuation of short covering that targets recent swing high of 11,180 and 11,260 (200 DEMA). Only a breach and close below its 100 WEMA (10,775) could commence fresh downside move targeting 10,600 levels that happen to be previous two-month long consolidation support. Hence, positional traders should continue holding longs with stop placed below 10,760 for a continuation of upside momentum initially targeting 11,270 (200 DEMA) in coming sessions

Stock: Rs TATA STEEL

Reco: Rs SELL

CMP: Rs 343

The stock breached and closed below its recent 52-week lows, indicating the commencement of a fresh downside in the stock. Daily RSI was unable to sustain above its signal line breached below the same post consolidating for 5 sessions supporting the overall structure for further downside in the stock. The stock is expected to drift lower till 321 price confluence zone. Hence, the stock can be sold with stop above previous sessions high of Rs 358.

Stock: AXIS BANK

Reco: BUY  

CMP: Rs 664.70

The stock is bouncing from recent swing lows around 645 levels. Downside was witnessed in the last two trading sessions in conjunction with lower volumes indicating that bears are unable to push prices lower and are losing strength. Daily RSI sustaining above its signal line indicates the stock is expected to witness further short covering momentum testing its 20 DEMA (685) that is acting at resistance on immediate basis. The stock might gather momentum to breach above 20 DEMA targeting its recent gap resistance of 694 levels. The stock can be bought with stop placed below 652 levels for Rs 685 & Rs 695 to be obtained in coming sessions

Disclaimer: Analyst may or may not hold positions in one or more stocks