Technical calls from HDFC Securities: Buy Biocon, Ultratech Cement

Nifty outlook and top trading ideas by Vinay Rajani - Technical Analyst, HDFC Securities.

Nifty View

The Nifty managed to extend its pullback with the help of realty, pharma and FMCG sectors. It has completed 38.2 per cent retracement of the swing which was seen from 11,982(July 5, 2019) to 11,461(July 9, 2019). Next resistance for Nifty is seen at 11,721 and 11,782, which happen to be 50 per cent and 61.8 per cent retracements. Immediate Support is seen at 11,635 and positional support is placed at 11,500.

BUY BIOCON

CMP: Rs 258
Target: Rs 275
Stop-loss: Rs 247
 

Last week, the stock closed with a bullish piercing line Candlestick pattern on the weekly charts. It has recently found support in the gap formed between Rs 225 and Rs 241 during December 2017. Partially filled gap can act a bullish reversal for the stock. RSI has been moving higher with positive divergence. Nifty Pharma Index has also confirmed higher top preceded by higher bottom on the daily charts.

Considering the technical evidences discussed above, we recommend buying the stock at the current market price (CMP), for the target of Rs 275, keeping a stop loss at Rs 247 on closing basis.

BUY ULTRATECH CEMENT

CMP: Rs 4,601
Target: Rs 4,920
Stop-loss: Rs 4,344
 

Last week, the stock formed a bullish hammer candlestick pattern on the weekly charts. Cement sector has been outperforming in the recent past. In the quarter ending June 2019, the stock broke out from the long-term consolidation on quarterly charts and fell in correction phase. Recent outperformance indicates that there would be resumption of a primary uptrend in the stock. Oscillators are holding strong on the charts.

Considering the technical evidences discussed above, we recommend buying the stock at the current market price, for the target of Rs 4,920, keeping a stop loss at Rs 4,344 on closing basis.

The author is a research analyst working with HDFC Securities. Views expressed are his own.