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Hot Stocks | Here is why you should bet on Hindustan Unilever, ICICI Lombard for short term

Hindustan Unilever has shown a strong reversal from the lower levels after forming a double bottom formation near Rs 1,930 levels on the daily time frame. The breakout comes with a bullish candle and above average volumes indicate fresh buying from the lower levels.

April 21, 2022 / 07:17 AM IST
 
 
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Rohan Patil, Technical Analyst at Bonanza Portfolio

After a strong sell off in the previous day's trading session, Nifty50 witnessed a gap up opening on April 20 and sustained above 17,050 levels throughout the day and traded within the 1 percent gain.

Benchmark index traded within its previous day's candle range and has formed a Bullish Harami candlestick pattern on the daily time frame and given a gain of almost one percent and closed above 17,100 levels.

But the index closed below its 21, 50 & 100 days exponential moving averages (17,355, 17,279, 17,237) post gap down opening on April 18, and prices continued to sustain below the same, indicating a negative structure in the index.

As the index has formed a Bullish Harami candlestick pattern on the daily chart, a sudden bounce back from the current level cannot be ruled out. The immediate support for the index is placed at 16,950 levels and the resistance is capped at 17,400 levels.

Here are two buy calls for next 2-3 weeks:

ICICI Lombard General Insurance Company: Buy | LTP: Rs 1,363 | Stop-Loss: Rs 1,340 | Target: Rs 1,486 | Return: 9 percent

The prices are trading in a lower low lower high formation since the third week of September and continued to trade within the falling channel pattern on the daily frame.

The stock has witnessed a falling channel breakout on the higher side and closed convincing above its support zone on April 1. And since then the breakout prices retested its trend line support and consolidated above its important averages on the daily interval.

Prices are trading well above its important averages and momentum oscillator RSI (relative strength index) has also witnessed a trend line breakout above 55 levels on the daily interval.

Image72042022

Hindustan Unilever: Buy | LTP: Rs 2,165 | Stop-Loss: Rs 2,078 | Target: Rs 2,305 | Return: 6.50 percent

The prices have shown a strong reversal from the lower levels after forming a double bottom formation near Rs 1,930 levels on the daily time frame. The breakout comes with a bullish candle and above average volumes indicate fresh buying from the lower levels.

The prices on the daily chart have given a breakout of falling channel pattern and prices have completed its throwback near its trend line support.

The momentum oscillator RSI (14) has also shown a strong bounce back from the oversold levels and currently hovering near 50 levels.

Image82042022

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.
RohanPatil Rohan Patil is the Technical Analyst at Bonanza Portfolio Ltd.