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Hot Stocks: Bharat Dynamics, Bharti Airtel, Havells top buys for next 3-4 weeks, here’s why

The key support level to watch out for from a short-term perspective is 15,500 and on the upside,16,000 will act as a strong resistance, said Karan Pai of GEPL CAPITAL

July 30, 2021 / 07:28 AM IST
 
 
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The Nifty has been trading in the 15,962-15,450 range for about eight weeks now. From a price action point of view, the index seems to be finding support and bouncing off as soon as prices reach the 15,450-mark.

On the option open interest front, August 26, 2021 expiry, the highest open interest and participation is seen at 16,000 call options, and on the put side, the highest participation is seen in the 15,500 put contracts. Thus, we can expect the broader range for the index to be 15,500-16,000.

On the indicator front, the RSI plotted on the weekly time frame remains above the 50-mark but has been forming a lower-high pattern for the past couple of months, pointing to the possibility of the bulls losing hold.

The key support level to watch out for from a short-term perspective is 15,500. If the index breaches the level, we can expect further downside towards 15,340 followed by 15,100-15,145 (multiple touchpoint level).

Close

On the upside, the-16,000 mark will act as a strong resistance and if this is breached, we can see prices moving higher and test 16,470 (50 percent extension level of the rise from 10,790-15,431 projected from 14,151).

The Nifty seems to have found a range of 15,500-16,000.

Here is a list of recommendations for the next three-four weeks:

Bharti Airtel: Buy| LTP: Rs 566| Target: Rs 623-640| Stop Loss: Rs 540| Upside 10-13%

On the monthly timeframe, Bharti Airtel has been moving higher since October 2018, indicating that the long-term trend of the stock remains bullish.

On the weekly timeframe, we can see that the prices have moved out of a consolidation. The Bollinger bands plotted on the weekly timeframe can be seen expanding as the price moves out of a consolidation, indicating expanding volatility as prices move higher.

On July 28, prices gained momentum and broke out of a consolidation. This was backed by good volume buildup, indicating participation in the up move.

On the indicator front, the RSI plotted on the weekly time can be seen above the 50-mark. It is moving higher towards the overbought level, indicating the presence of bullish momentum as the prices move higher.

MACD can be seen moving above the zero line after forming a bullish crossover, signalling the presence of a bullish trend.

The key resistance level to watch out for is 623, the recent swing high, followed by 640, the 61.8 percent extension level of the rise from 394-623 projected from 499.

The key levels to watch for on the downside are 540, the multiple touchpoint level, followed by 520, the recent swing low.

On the medium-term charts, Bharti Airtel seems to be witnessing a breakout out of a consolidation. This breakout is backed by a good volume buildup, indicating participation in the up move.

The technical parameters tell us that the prices are moving out of consolidation and we expect the price to move higher towards 623 and 640.

Our bullish view will be negated if the price slips below 540. If the stock stays below the 540-mark, we may see a further fall towards 520.

Bharat Dynamics: Buy| LTP: Rs 404| Target: Rs 444-481| Stop Loss: Rs 377| Upside 10-19%

Bharat Dynamics (BDL) on the monthly time can be seen drifting higher after testing a low of 280. On the weekly timeframe, we can see the prices bouncing off the upward slopping trendline.

On July 19, the stock moved higher and not only breached but also managed to close above the multi-month resistance level. This up move was backed by above-average volumes, indicating participation in the up move.

The Bollinger bands plotted on the weekly time frame can be seen expanding after a prolonged sideways move, pointing to expanding volatility as prices move higher.

On the indicator front, RSI plotted on the weekly timeframe can be seen placed above the 50-mark. It is moving higher towards the overbought level, indicating the presence of bullish momentum as the prices move higher.

MACD, too, is placed above the zero line and can be seen forming a bullish crossover, indicating the presence of bullishness in the trend.

The key resistance level to watch out for is 444, the multiple touchpoint level, followed by 481, the previous swing high.

On the downside, 377, the multiple touchpoint level, followed by 355,20-week SMA, are the key levels.

On the medium-term charts, BDL seems to be witnessing a breakout out of a consolidation. This breakout is backed by a good volume buildup, signalling participation in the up move.

These technical parameters point to the possibility of the prices gaining momentum and moving higher, we expect this momentum buildup to take the prices higher towards the 444 and 481 eventually.

Our bullish view will be negated if the price falls below 377. If it stays below the 377-mark, we can see a fall towards 355.

Havells India: Buy| LTP: Rs 1176| Target: Rs 1188-1230| Stop Loss: Rs 1100| Upside 5%

On the monthly timeframe, Havells India has been in a strong uptrend since May 2020. On the weekly timeframe, we can see that the prices have broken out of a multi-week consolidation, with good volume buildup since the past three sessions.

On July 20, the price gained momentum and went past the 1,100-mark. On the indicator front, RSI plotted in the weekly time can be seen placed above the 50-mark.

The stock is moving higher towards the overbought level, indicating the presence of bullish momentum as prices move higher.

The key resistance level will be 1,188, the multiple touchpoint level. If this level is breached, we can expect further up-move towards 12,30, the previous swing high, and 13,50, the 50 percent extension level of the rise from 447-1231 projected from 958.

On the downside, 1,100, the breakout level, and 1039, the multiple touchpoint level, will be the levels to watch for.

Havells on the higher and the medium-term charts seems to be witnessing a breakout out of a multi-month consolidation. This breakout is backed by good volume buildup, indicating participation in the up move.

The technical parameters tell us that the price is gaining momentum after breaking out of a consolidation. We expect the momentum to take prices to the 1188-mark immediately followed by 1,230 and 1,350.

Our bullish view will be negated if the price slides below the 1,100-mark. If the price remains below the 1,100-mark, it may slip further towards 1,039.

(The author is a Technical Analyst, GEPL Capital)

Disclaimer: The views and investment tips expressed by 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.

 

Karan Pai

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