Top technical calls from HDFC Securities: Buy SBI and L&T

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

UTILISE DIPS TO GO LONG

On May 21, Nifty opened higher than previous day high and closed with a fall of 116 points, losing half of the gain which was seen on May 20 post opening. This has resulted in to “Dark cloud cover” candlestick pattern on the daily charts, which indicates probable correction.

However, Positional trend of Nifty is bullish and any dip should be bought in to. The gap range 11,426-11,591, formed on May 20 is expected to act as a strong support in Nifty. Positional Target for the index is seen at 12,430.

BUY SBIN (Rs 337)

Target: Rs 360 

Stop loss: Rs 320

The stock is on the verge of registering new all-time high above Rs 351. This move would result in to long-term 10-year consolidation breakout. It is trading above all important moving averages. Higher tops and higher bottoms are well intact. Oscillators and Indicators are showing strength in the current trend.

Considering the technical evidences discussed above, we recommend buying the stock at the closing market price (CMP) and average it at Rs 330, for the target of Rs 375, keeping a stop loss at Rs 320 on closing basis.

BUY LARSEN & TUBRO (Rs 1446)

Target: Rs 1,520 

Stop loss: Rs 1,400

It is on the verge of registering new all-time high above Rs 1,460. This would also result in to breakout from last 16 month’s consolidation range, indicating breakout on the medium-to-long term charts. Oscillators and Indicators are showing strength in the current trend.

Considering the technical evidences discussed above, we recommend buying the stock between CMP and Rs 1,400 for the target of Rs 1,650, keeping stop loss at Rs 1,350 on closing basis.

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