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Hot Stocks | HAL, Escorts, HDFC Bank can give up to 18% return in short term

The bullish momentum can take the Nifty towards 17,019. If the index goes past this level, it can head to 17,799, says Karan Pai of GEPL Capital

August 27, 2021 / 07:11 AM IST
 
 
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The Nifty, in the medium term, has not only sustained above the breakout level of 15,962 but has also formed a higher high and higher low pattern.

On the option open interest front (September 30, 2021 expiry), the highest Call open interest addition is seen at 16,500.

On the Put side, open interest addition is seen at 17,200. Thus, we can expect the broader range of the index to be 16,500-17,200 in the weeks to come.

RSI plotted on the weekly timeframe remains above the 50 mark and is drifting higher towards the overbought level, indicating that the bulls are attempting to take control.

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The Nifty is moving higher after breaking out of a long consolidation.

The bullish momentum may continue and take the index towards 17,019 (a 61.8 percent extension level of the rise from 10,790-15,431, projected from 14,151 mark).

If the index manages to breach 17,019, we may see it move higher towards 17,799 (78.6 percent extension level of the rise from 10,790-15,431, projected from 14,151 mark).

The three-week low of 16,162 will act as a key support level. If it is breached, it may slide to 15,900.

Here are three buy calls for the next three-four weeks:

Hindustan Aeronautics (HAL) | LTP: Rs 1,286 | Target price: Rs 1,520 | Stop loss: Rs 1,150 | Upside: 18%

This stock has been forming a higher high, higher low pattern on the monthly timeframe since November 2020, indicating the long-term trend of the stock remains strongly bullish.

On the weekly timeframe, it has been drifting higher after testing a low of Rs 927 in April 2021.

The stock, on the medium-term charts, seems to be moving out of a consolidation. This up move is backed by rising volume, indicating participation in the breakout.

RSI on the weekly timeframe is placed above the 50-mark and is moving higher, suggesting bullish momentum in the uptrend.

Key resistance level for the stock is Rs 1,295 (78.6 percent extension level of the rise from Rs 658-Rs 1,123, projected from Rs 929), followed by Rs 1,392 (100 percent extension level of the rise from Rs 658-Rs 1,123, projected from Rs 929) and eventually at Rs 1,520 (127 percent extension level of the rise from Rs 658-Rs 1,123, projected from Rs 929).

The multiple touchpoints and the breakout level of Rs 1,150 will act as a red-flag level followed by Rs 1,050 (20-week simple moving average).

The technical parameters suggest the stock may move higher towards Rs 1,295 immediately.

If it goes past it, it may head towards Rs 1,392 and Rs 1,520 eventually.

Escorts | LTP: Rs 1,345.30 | Target price: Rs 1,570 | Stop loss: Rs 1,270 | Upside: 17%

The stock has been forming a higher high higher low pattern on the monthly timeframe since August 2019, indicating the long-term trend of the stock remains bullish.

RSI plotted in the weekly chart has been hovering around the 50-mark for the last couple of weeks and can be seen moving higher towards the overbought level, indicating the bullish momentum.

Key resistance level for the stock is Rs 1,470 (February 8, 2021 high), followed by Rs 1,570 (50 percent extension level of the rise from Rs 526-Rs 1,468, projected from Rs 1,108).

The level of Rs 1,270 (multiple touchpoint level) will act as a red-flag level followed by Rs 1,194 (20-week simple moving average).

The technical parameters suggest the stock may move higher towards Rs 1,470. If it breaks Rs 1,470, it may head towards Rs 1,570.

HDFC Bank | LTP: Rs 1,555.10 | Target price: Rs 1,733 | Stop loss: Rs 1,530 | Upside: 11%

This stock has been forming a higher high, higher low pattern on the monthly timeframe since March 2020, indicating the long-term trend of the stock remains bullish.

RSI plotted on the daily and weekly timeframe can be seen placed above the 50-mark and seems to be moving higher towards the overbought level, indicating that the bulls have taken control.

Key resistance level for the stock is Rs 1,641-1,661 (previous swing high and 50 percent extension level of the rise from Rs 1,025-Rs 1,641, projected from Rs 1,353), followed by Rs 1,733 (61.8 percent extension level of the rise from Rs 1,025-Rs 1,641, projected from Rs 1,353).

Multiple touch-point levels of Rs 1,530 will act as a red-flag level followed by Rs 1,470 (20-week simple moving average).

The technical parameters suggest the stock may move towards Rs 1,641-Rs 1,661 immediately. If it goes past Rs 1,661, we may see it touching Rs 1,733.

(The author is a technical analyst at 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
first published: Aug 27, 2021 07:11 am
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