Here's why Vinay Rajani of HDFC Securities is bullish on GSFC, Sun Pharma

The technical analyst expects the Nifty to turn bearish below 16,555; whereas on the upside sees resistance around 16,927 and 17,040 levels.

The NSE Nifty broke the 5-session winning streak by falling more than 1.3 per cent, to close at 16646. The Nifty has formed a bearish “Dark Cloud Cover” pattern on the daily charts. Bearish trend reversal for short term would be confirmed once Nifty breaches yesterday's low of 16,555. 

Below 16,555, the Nifty has support at 16,447 and 16,300 levels, which happens to be 38.2 per cent and 50 per cent Fibonacci retracements of the entire upswing seen from 15,671 to 16,927. Resistances for the Nifty are seen at 16,927 and 17,040.

GSFC

BUY

Target: Rs 148

Stop Loss: Rs 134

Last Close: Rs 139.55

The stock price has broken out from triple top resistance of Rs 139, and downward sloping trend line  on the daily chart. The price breakout is accompanied by jump in volume and now the stock is also placed above all important moving averages. The fertilizer sector has been outperforming for the last couple of weeks.

Sun Pharma

BUY

Target: Rs 945

Stop Loss: Rs 860

Last Close: Rs 892

The stock has been forming higher tops and higher bottoms on the daily charts. The stock is placed above all the important moving averages, which indicates bullish trend on all time frame. Sun Pharma has been outperforming most of the other pharma stocks and is hovering around its 52-week high. 

(Vinay Rajani, Technical Research Analyst, HDFC securities. Views expressed are personal.)