Hot Stocks | Here's why Wipro and Asian Paints are a buy for the short term

Nagaraj Shetti

After showing weakness last Friday, Nifty shifted into a consolidation mode on Monday, showing minor upside recovery from the lows and closed the day with minor gains.

A small body of negative candle was formed with long lower shadow. This pattern indicates the formation of Doji type candle pattern which indicates the possibility of a minor upside in the next session.

The formation of a lower high of 11,584 of September 3, the presence of Nifty below the key multiple supports, and the formation of a significant bearish engulfing pattern of August 31 are all pointing towards limited upside possibility from here and there is a chance of a resumption of weakness from the highs in the next few sessions.

The bearish engulfing pattern on the weekly chart is also intact, hence any rising attempt from here could encounter selling pressure at the highs.

The last week's high of 11,794 could be considered as a near-term top for the market as of now.

The near term negative trend status remains intact for the market and any upside bounce from here up to 11,450-11,500 is going to be a 'sell on rise' opportunity.

Immediate support is around 11,350-11,300 levels for the next one week.

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

Wipro | Buy | LTP: Rs 278.70 | Target price: 305 | Stop loss: Rs 260 | Upside: 9%

This IT stock, as per the weekly chart, had been moving in a range for the last month and is making an attempt of an upside breakout of the range around Rs 285.

The positive sequential movement like higher tops and bottoms is intact and this indicates the intermediate uptrend of the last few months is intact.

Weekly 14 period RSI sustained above 60, which shows the strength of upside momentum in the stock price.

Asian Paints | Buy | LTP: Rs 1,980 | Target price: Rs 2,180 | Stop loss: Rs 1,830 | Upside: 10%

Asian Paints, on the weekly as well as the monthly chart, had been moving in a sustained uptrend for the last many months.

The downward corrections in between have turned out to be a buy on dips opportunity.

Recently, the stock price moved above the hurdle of Rs 1,900 and is sustaining above this area as per the concept of change in polarity.

Volume is rising along with the up-move in the stock price and daily and weekly RSI shows positive indication.

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

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