Nifty in a choppy trend; Markets expected to remain stock specific bullish
The Nifty continued to remain choppy in a narrow range on Tuesday with sector-specific rotation going on. IT and Pharma sectors have shown the strength while financials have shown weakness. Nifty remained in the range of 14,500 to 14,800 for the fourth consecutive session, ending up with no directional indication. It is better to take stock-specific bullish approach. Midcap and Smallcap Indices are expected to outperform. That apart, the IT index is likely to see sustained uptrend. Index Direction will be cleared once we see Nifty breaking the range of 14,500-14,800 on closing basis.
Buy Tata Elxsi (2,869) | Target: Rs 3,100 | Stop-loss: Rs 2,700
The stock price has given trend line breakout on the daily charts. Volumes have also gone up along with the price rise during the breakout. The IT Index looks strong on the medium-to-long term charts. The stock price has been finding support on its 50 days EMA. Indicators and Oscillators like RSI and MACD have turned bullish on short term charts. The stock has been trading above all important moving average parameters.
Buy LTI (4,278) | Target: Rs 4,650 | Stop-loss: Rs 4,079
The stock price has been forming higher tops and higher bottoms on the daily and weekly charts. It has broken out from the bullish “Flag” pattern on the weekly chart. Moreover the IT Index looks strong on the medium-to-long term charts. The stock price has been finding support on its 50 days EMA. Indicators and Oscillators like RSI and MACD have turned bullish on short term charts. The sort-term moving averages and placed above medium to long term moving averages.
Disclaimer: Vinay Rajani is Senior Technical and Derivative Research Analyst at HDFC Securities. The analyst doesn't have any holding in the stock. Views are personal