Nifty shows signs of reversal; 3 stocks to buy at current market price

People look at a screen displaying India's Finance Minister Arun Jaitley presenting the budget, on a facade of the Bombay Stock Exchange (BSE) building in Mumbai, India, February 29, 2016. The government unveiled a budget for the poor on Monday, announcing new rural aid schemes and skimping on a bank bailout, in a strategy shift that seeks to boost Prime Minister Narendra Modi's ruling party in coming state elections. REUTERS/Danish Siddiqui - RTS8IIY

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26 Aug, 2025 12:21

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By Abnish Kumar Sudhanshu

Weighed down by weak global cues and profit booking at home, Nifty slipped below its crucial support of 9,200 on Monday, which also points to a sign of a reversal.

The Nifty on Friday formed a ‘shooting star’ kind of pattern on daily as well as on weekly chart followed by a bear candle on Monday’s daily chart.

If shooting star is an early indication of reversal then the formation of a bear candle on following day shows bulls are losing and bear seems to be in upper hand. A shooting star formation is formed when profit booking emerges at a higher level.

The overbought level in trend following momentum such as RSI shows market to trade with negative biases and upside seemed capped around 9,250. On the downside, 20 days moving average placed at 9,130 will be immediate support level for the index.

Here are top 3 stocks which traders can buy at the current market price based on technical factors for the short term:

Tata Motors: BUY| Target: Rs 495| Stop Loss Rs 467| Upside 4 percent

Tata Motors on Friday formed a Gravestone Doji candlestick pattern on the daily chart followed by a bullish spinning top on Monday’s daily chart. After a long subdued trade, spinning top indicates weakness among the bears and a potential change or interruption in trend.

Canara Bank: BUY| Target: Rs 326| Stop Loss Rs 302| Upside 5 percent

Banking stocks are in a short-term bull market as they are moving higher with healthy consolidation. On the daily chart, Canara Bank closes with forming a hammer pattern which is a bullish formation.

The momentum oscillators of the stock are yet to show a divergence. The stock found strong support around its 20-DMA which now stands at Rs 296.

DLF: BUY| Target Rs 163| Stop Loss Rs 150| Upside 4 percent

DLF formed a bullish engulfing candlestick chart pattern on Monday. An engulfing formation indicates all the selling witnessed on Friday is consumed and bulls had carried longs for the next trading session.

The momentum indicators such as RSI is yet to reach the oversold level and a there is a crossover in MACD font too. As the stock is in a bull market, we expect higher level is coming and one could go long on the stock with a stop loss at its 20-DMA placed at Rs 146.

Disclaimer: The author is Director & Research Head, Amrapali Aadya Trading & Investments. 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.