Chartist Talks: Sudeep Shah of SBI Securities bullish on these 4 stocks; sees strength in IndusInd Bank but recommends avoiding

Are you highly bullish on Godrej Properties and Persistent Systems?

Godrej Properties

The stock has given a neckline breakout of Adam & Adam Double Bottom pattern. This breakout is confirmed by robust volume. In addition, the stock has formed a sizeable bullish candle on a breakout day, which adds strength to the breakout. Currently, the stock is trading above its 20 and 50-day EMA level. These averages are started edging higher, which is a bullish sign. Most noteworthy, the daily RSI (Relative Strength Index) surged above 60 mark for the first time after December 2024. Hence, we are bullish on this stock.

Persistent Systems

The Nifty IT has been outperforming the frontline indices since the last couple of trading sessions. Persistent Systems has recently surged above its short and long-term moving averages. The daily RSI is about to cross 60 mark. Hence, we are bullish on this stock.

Do you foresee a strong breakout in the Nifty 50 next week, following more than a week of consolidation?

The benchmark index Nifty wrapped up April with an impressive gain of 3.46 percent. Notably, it formed a sizeable bullish candle with a long lower shadow on the monthly chart, reflecting strong buying interest whenever the index dipped to lower levels. This positive price structure underscores the market's underlying strength and resilience.

What adds more weight to this rally is that it came amidst persistent global challenges. Despite concerns over trade war tensions, geopolitical strain between India and Pakistan, and a sharp decline in the US dollar index, the domestic market held its ground, supported by steady buying and improving investor sentiment.

From a technical perspective, Nifty continues to trade well above its key short and long-term moving averages, which further reinforces the bullish bias. Interestingly, the daily RSI has recently taken support near 60 mark and thereafter witnessed a rebound, which is a bullish sign as per RSI range shift rules. However, we believe the index is likely to consolidate in a broad range of 24,600-23,800 level as investors remain cautious amid the anticipated geopolitical tensions between India and Pakistan.

In the near term, the zone of 24,200-24,170 will serve as immediate support. A slip below 24,170 could open the door for further downside towards the stronger support zone of 23,850-23,800. On the upside, the 24,550-24,600 zone will act as a key hurdle. A sustained move above 24,600 could trigger a sharp rally towards 24,850, with the next target placed near the 25,100 mark.

Do you think this is the right time to buy IndusInd Bank?

Technically, IndusInd Bank is showing signs of strength. The stock has built a solid base between Rs 630-720 zone and has since started forming higher tops and higher bottoms, which is a classic bullish structure. It has also crossed above its short-term moving averages, and the daily RSI moving past the 60 mark further confirms the positive momentum.

However, from a fundamental and sentiment perspective, we would advise caution. The recent corporate governance concerns have clouded the outlook, and despite the bullish chart setup, we recommend avoiding fresh buying at this stage until there’s more clarity.

What are your top two stock picks for the upcoming week?

Indian Oil Corporation

The stock has given a consolidation breakout on a daily scale. This breakout is confirmed by above 50-day average volume. In addition, it has surged above its 200-day EMA level for the first time after October 2024, which is a bullish sign. The daily RSI is in a bullish zone, and it is in rising mode. Hence, we recommend accumulating the stock in the zone of Rs 144-142 levels with a stop-loss of Rs 135. On the upside, it is likely to test the level of Rs 160 in the short term.

DLF

The stock is on the verge of giving trendline breakout on a daily scale. It is currently trading above its 20 and 50-day EMA level. The daily RSI is quoting above 55, and it is in rising mode, which is a bullish sign. Hence, we recommend accumulating the stock in the zone of Rs 690-685 levels with a stop-loss of Rs 665. On the upside, it is likely to test the level of Rs 750 in the short term.

Do you expect Bank Nifty to consolidate between its previous record high and the new record high in the coming week, or is there a possibility of a significant breakout?

The banking benchmark index, Bank Nifty, has delivered a standout performance, strongly outperforming the broader frontline indices. Most notably, the index scaled a fresh all-time high during the April month, underscoring the strength in the banking space. By the end of April, Bank Nifty closed with an impressive gain of nearly 7 percent, extending its leadership role in the market rally.

Currently, with the index trading near its record-high levels, all key moving averages and momentum-based indicators are firmly aligned to the upside, reflecting strong underlying bullish momentum. However, following its sharp rally, Bank Nifty has entered a phase of consolidation over the past seven trading sessions. This pause is seen as a healthy sign, allowing the index to digest recent gains and build a base for the next leg of the move.

The broader technical setup remains favourable, but near-term consolidation may continue before fresh upward momentum resumes. Talking about crucial levels, the zone of 55,900-56,000 will act as a crucial hurdle for the index. Any sustainable move above 56,000 levels will lead to sharp upside rally upto the level of 56,600, followed by 57000 in the short term. While, on the downside, the zone of 54,500-54,400 will act as immediate support for the index.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.