If May 17 move was any indication to go by, one could have taken very important cues from the market move that day.
After moving within the much-anticipated range of 11,300 and 11,150 for most of the last week, the bulls finally succeeded in taking control of the higher territory. The support of 11,150 was the change in polarity top formed in February 2019.
On Bank Nifty, the RSI did take support at 40 on the daily chart, thus bouncing the index from that level to its previous high of 30,900.
Most sectors have given a huge move on the upside, thanks to the multiple signs of support, either on price or momentum or both. The auto sector seems to be leading the pack. Stocks including Maruti Suzuki, Ashok Leyland and Hero MotoCorp seem to be poised for a good move in the coming week.
Maruti Suzuki: Buy | Target: Rs 7,850 | Stop loss: Below Rs 6,650
Maruti Suzuki Limited – Weekly Chart
Last week, Maruti once again formed the bullish candle pattern at trendline support, with RSI took support at 40 level. The stock gives a good opportunity to buy on a dip to Rs 6,900 for a stop loss below Rs 6,650 for a target of Rs 7,850.
Ashok Leyland: Buy | Target: Rs 95.50 | Stop loss: Below Rs 83.50
Ashok Leyland Limited – Weekly Chart
Ashok Leyland formed a bullish candlestick pattern last week near RSI support zone and propelled the stock to higher levels. One could consider going long here on a dip to Rs 86 with a stop loss below Rs 83.50 for a target of Rs 95.50.
Hero MotoCorp: Buy | Target: Rs 3,010 | Stop loss: Below Rs 2,580
Hero Moto weekly chart
After displaying positive divergence on the weekly RSI, Hero MotoCorp formed a big white candle pattern with RSI taking support at 40. This could be good trade to go long on a dip to Rs 2,650 with a stop loss below Rs 2,580 for a target of Rs 3,010.
The author is Founder of MalkansView.
Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.