Last week, the markets experienced a notable surge following the Bharatiya Janata Party’s (BJP) decisive triumph in the assembly elections of three key states. This week, after a brief consolidation phase, the Nifty achieved a new lifetime high, propelled by a dovish stance from the Federal Reserve.
Technical indicators are signaling positivity as the Nifty confidently maintains levels above the 20-day and 50-day Simple Moving Averages (SMA). Momentum indicators, such as the 14-week Relative Strength Index (RSI), remain in an upward trajectory without reaching overbought levels. This suggests the potential for further upward movement in the upcoming sessions, with crucial support levels at the recent lows of 20,769.
Here are our top picks for the next 15-26 trading sessions:
Mahindra & Mahindra Financial: Buy M&MFin experienced a correction from its intermediate high of 347 in July 2023 but found support around the 237 levels in November 2023. This level coincides with previous intermediate highs, indicating a change of polarity principle where past resistances now act as supports.
The stock has rebounded, breaking out of its recent trading range with above-average volumes, signaling a positive uptrend. Technical indicators are favorable, with the stock trading above the 20-day and 50-day SMA. Daily momentum indicators, like the 14-day RSI, are on the rise without being overbought, indicating further upside potential.
With a positive intermediate technical setup, we anticipate the stock’s upward trajectory in the coming weeks and recommend a buy. Entry levels are suggested between 289 and 293, with the current market price (CMP) at 291. A stop loss is set at 267, and upside targets are at 340.
Brigade Enterprises: Buy Brigade has been on a healthy uptrend since touching a low of 565 in September 2023. This week, the stock rebounded from the 20-day SMA with above-average volumes, resuming its upward trajectory. Trading above the 50-day SMA and with rising momentum readings like the 14-day RSI, the stock shows positive signs.
Given the positive intermediate technical setup, we recommend a buy between the 852-856 levels, with CMP at 854.0. A stop loss is placed at 793, and the target is set at 930.
(Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)
