Nifty may outperform the broader market in the near term: HDFC Securities

Among individual stocks, Vinay Rajani the technical & derivative analyst of HDFC Securities recommends to Buy Infosys and Sun Pharma.

Nifty View

The Nifty swung between gains and losses on 12 September after scaling a fresh all-time at 20,110.35 in early trade. The market breadth deteriorated sharply as mid and smallcap indices nosedived and closed on a weak note.

Both Small and Midcap Indices closed with big bear candle, which resulted in to bearish “Engulfing” pattern on the daily chart. This move indicates the bearish trend reversal for these indices.

However, Nifty has managed to close relatively strongerand is expected to outperform the broader markets in the short term.

Traders are advised to shift focus from midcap to largecap stocks. Nifty is still in an uptrend and has got strong support in the zone of 19,800-19,900. 

BUY

Infosys

Last close: Rs 1,501

Targets: Rs 1,555; Rs 1,590

Stop-loss: Rs 1,460

The stock price has surpassed the crucial resistance of previous swing high placed at Rs 1,498.80. Nifty IT index has posted fresh 52-week high and the sector is expected to outperform.

The stock is placed above all important moving average, indicating bullish trend on all time frames. Indicators and oscillators like MACD and RSI have turned bullish on weekly chart

BUY

Sun Pharma

Last close: Rs 1,145

Targets: Rs 1,214; Rs 1,265

Stop-loss: Rs 1084

The stock price has broken out from downward sloping channel on the daily chart. The Stock price found support near its 50 days EMA and bounced back. The stock is trading above its 20, 50 and 200 DMA, indicating bullish trend on all time frame. 

Indicators and Oscillators like MACD and RSI have turned bullish on the daily charts. Nifty Pharma Index has resumed its primary uptrend.

(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC  Securities. Views expressed are personal).