Nifty to remain rangebound; Buy Nestle, HDFC AMC, DLF, says Teji Mandi

Market outlook: Nifty and Bank Nifty are likely to remain rangebound until a decisive breakout on either side, says Jatin Gedia, VP - Technical Research at Teji Mandi Investment Technologies.

Stock Market Outlook today

  The Nifty snapped its three-day losing streak, witnessing buying interest around the lower end (23,800) of the broad range of 23,800 to 24,200 on Wednesday. It formed a bullish belt-hold pattern and closed with gains of 140 points.  The index must surpass 24,050 for positive momentum to continue toward 24,200 - 24,400 in the short term. The ideal way to trade such a range-bound consolidation is to take a contrarian view at the extremes of the range; i.e. at the support zone of 23,800, we should look for buying opportunities and vice versa.  So we expect the positive momentum to continue toward the 24,150–24,200 zone, i.e., the upper end of the range. A decisive breach of the range on either side will set the direction for the next leg. Until the range persists stock-specific action and sector rotation are likely to continue.  Bank Nifty also witnessed buying interest and closed the day on a positive note. We expect Bank Nifty to consolidate between 57,000 and 58,500 over the next few trading sessions as we witness divergence between the daily and hourly momentum indicators.  The uptrend is still intact and dips toward the 57500–57600 support zone should be used as a buying opportunity. a breach below 57000 shall weaken the structure. 

Stocks to buy by Jatin Gedia of Teji Mandi

Buy Nestle India - CMP - 1453 SL - 1420 TGT - 1539

Nestle India stock formed a base around the 40-day moving average and broke out of a narrow consolidation, suggesting a resumption of the uptrend. Positive crossover on the MACD suggests a buy signal. 

Buy HDFCAMC - CMP - 2748 - SL - 2670 TGT - 2875

A pole and flag pattern breakout accompanied by above-average volume suggests the start of a fresh leg of upmove. RSI sustaining above 60 suggests that the bullish sentiment is intact.

Buy DLF - CMP 648, SL 630, TGT 690

DLF stock has broken out of an Inside bar pattern on the weekly charts, suggesting a continuation of the uptrend after a brief consolidation. Positive crososver on the MACD suggest a Buy signal.  (Disclaimer: This article is written by Jatin Gedia, VP - technical research, Teji Mandi Investment Technologies. Views expressed are his own. Readers' discretion is advised.)