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Hot Stocks | 'Can bet on KEI Industries, BASF India, Sasken Technologies for short term'

The immediate target for the Nifty is around 17,000-17,100 level at which we have seen Call writing.

August 31, 2021 / 07:09 AM IST
 
 
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Nifty continued its winning streak for the sixth consecutive day on August 30 as it surged 226 points to close at a new high at 16,931.

The intermediate uptrend remains bullish as the benchmark index continues to make higher tops and higher bottoms over the last several months.

Nifty has been trading above the 20 and 50-day exponential moving average which gives further evidence of an uptrend.

With intermediate and long-term momentum readings like the 14-week and 14-month RSI in rising mode and not showing any signs of negative divergence, we expect the uptrend to continue.

Close

The slope of the daily ADX for Nifty is rising which indicates the index could continue its momentum in the medium term.

In the options segment, we have seen Put writing at 16,400-16,500 levels. During the last correction, Nifty has found support at 16,376 and bounced back.

This level coincides with the 20-day exponential moving average which is currently placed at 16,450.

Therefore, we believe that the short-term trend will remain intact till Nifty is trading above 16,400.

While we remain open to further upsides, a short-term trend reversal would be confirmed only if the Nifty closes below 16,400.

The immediate target for the Nifty is around 17,000-17,100 level at which we have seen Call writing.

Far resistance is seen around 17,500.

Bank Nifty has broken out on the daily chart by surpassing the previous resistance of 36,169 to close at a five-month high.

Bank Nifty is expected to move towards the next target of 36,800 and 37,500 levels in the coming weeks.

Correction in the mid and smallcap space is over and they are likely to outperform the benchmark index from hereon.

Private banks, PSU banks, NBFC and metal space should be on the radar for getting higher returns in the coming days.

Here are three buy recommendations for the next 2-3 weeks:

KEI Industries | Buy | LTP: Rs 775.10 | Target price: Rs 870 | Stop loss: Rs 720 | Upside: 12%

This stock has broken out on the daily line chart with higher volumes.

The trend of the stock is positive as it is trading above all short-term and long-term moving averages.

Plus DI is placed above the minus DI while the ADX line is placed above 20, indicating momentum in the current uptrend.

Daily RSI has shown trendline breakout which is a bullish development for the short term.

BASF India | LTP: Rs 3,614 | Target price: Rs 4,000 | Stop loss: Rs 3,390 | Upside: 11%

After correcting in the last few days, this stock resumed its uptrend to close at the highest level since August 16 with higher volumes.

It has formed a strong base of Rs 3,400 by taking support multiple times around this level.

Daily RSI has shown trend line breakout, which is a bullish development for the short term.

It has been forming bullish higher top higher bottom formations on the weekly chart.

Recent correction provides an opportunity to buy the stock for the medium term.

Sasken Technologies | LTP: Rs 1,317 | Target price: Rs 1,450 | Stop loss: Rs 1,250 | Upside: 10%

This stock has already broken out on the monthly chart by surpassing the resistance of Rs 1,150.

Accumulation was seen during the last few days where volumes have been higher during the up-days as compared to down-days.

The primary trend of the stock is positive as it is trading above its 50, 100 and 200-day exponential moving average.

Plus DI is placed above the minus DI while the ADX line is placed above 20, indicating momentum in the current uptrend.

(The author is a technical research analyst at HDFC securities)

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Nandish Shah
first published: Aug 31, 2021 07:09 am
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