Here's why HDFC Securities recommends buying VRL Logistics, Natco Pharma

Logistics stocks have been showing strength on the medium term charts, according to Vinay Rajani of HDFC Securities.

Nifty rose for the third consecutive session to settle at 18,055. From the bottom of 16,410 registered on 20th Dec 2021, the index has risen more than 10 per cent. It has been holding its level above short to medium term moving averages, which indicates bullish trend on all time frame. Support for the Nifty is seen at 17,944 and 17,655, while resistance for the same is seen at 18,210 and 18,604. 

Stock recommendations:

Buy VRL Logistics (Rs 495) | Target: Rs 550 | Stop-loss: Rs 462

The stock has broken out from the bullish “Flag” pattern on the weekly chart with rising volumes. Logistics stocks have been showing strength on the medium term charts. Indicators and oscillators have turned bullish on daily and weekly charts. The stock has been forming higher tops and higher bottoms on weekly charts. 

Buy Natco Pharma (Rs 916.5) | Target: Rs 990 | Stop-loss: Rs 860

The stock is sustaining above the previous high resistance placed at 901 on daily chart. Recent price rises have been with healthy volumes, which indicates accumulation in the stock. It has surpassed the crucial resistance of its 50 days EMA and is on the verge of surpassing the long term resistance of 200 days EMA, placed at 900. It has also broken out from last 10 week’s price consolidation. Indicators and oscillators have turned bullish on the daily chart. 

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Disclaimer: Vinay Rajani is a Senior Technical & Derivative Analyst at HDFC Securities. He does not have any holdings in the above stocks and his views are personal.