Recovery in small & mid-cap indices has begun; Sharekhan's 3 technical stock picks for short term

Sensex_Nifty

For the last couple of weeks, the small- and mid-cap indices have been witnessing divergence, a phase which is unlikely to last for long. Both the indices are likely to witness consolidation before they resume further journey toward the north, Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan, said in an interview with Moneycontrol’s Kshitij Anand. Edited excerpts:

USD-INR had recently broken out from a bullish Flag pattern with a breakaway gap and went on to achieve the conservative pattern target. In the week gone by, it attempted to test the gap area, which proved to be a strong support.

The bulls rushed in near the upper-end of the gap i.e. near 69.40 and pushed the currency pair above 70 yet again. Overall, the currency pair is clearly on an upward trajectory and is likely to head towards 70.60 & 71.50.

The recovery for the broader market has indeed begun. The first leg of the recovery was seen from the second half of July running into the first week of August.

For the last couple of weeks, the small- and mid-cap indices have been witnessing divergence, a phase which is unlikely to last for long. Both the indices are likely to witness consolidation before they resume further journey toward the north.

Ujjivan Financial Services: Buy | LTP: Rs 357 | Stop Loss: Rs 341 | Target: Rs 390 | Return: 9%

The stock is witnessing a lower Bollinger reversal on the weekly chart. In its recent rise, it has formed an impulse structure on the hourly chart. The daily momentum indicator has given a fresh buy signal.

Vedanta: Buy | LTP: 223| Stop Loss: Rs 215| Target: Rs 245| Return 10%

The stock has formed a strong engulfing bull candle near a crucial support zone. The daily momentum indicator is starting a new cycle on the upside from the equilibrium line whereas the weekly momentum indicator is already in bullish mode.

Eicher Motors: Buy| LTP: Rs 28796| Stop Loss: Rs 28,070| Target: Rs 31,700| Return 10%

The stock has formed a base for itself near the crucial daily moving averages & is preparing for an Impulse move on the upside. Momentum indicators on various time frames are in bullish mode.