BY Subash Gangadharan
On the daily chart, we can observe that with the sharp fall seen last week accompanied with falling momentum readings like the 14-day RSI, the short term trend still remains down.
In this scenario, Nifty could correct towards the recent intermediate lows of 18,837. Immediate resistances are now at 19,096-19,159.
The below picks are for the next 15-26 trading sessions
Alkem Laboratories: Buy
Alkem Laboratories has corrected from an intermediate high of Rs. 4,243 tested in August 2023 and found support at the Rs. 3,447 levels in early October 2023, which also coincides with the previous intermediate highs, thereby indicating the change of polarity principle is at work as prior resistances are now acting as supports.
The stock has since then bounced back and broken out of its recent trading range last week on the back of healthy volumes. This augurs well for the uptrend to continue.
Technical indicators too are giving positive signals. The stock is currently trading above the 20 day and 50 day SMA. Daily momentum indicators like the 14-day RSI too are in rising mode and not overbought, suggesting scope for more upsides.
With the intermediate technical setup too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy. Our entry levels are between Rs 3,714 and Rs 3720. CMP is Rs 3,717.65. Stop loss is at Rs 3,540 and upside targets are at Rs 4,000.
Asian Paints: Sell
Asian Paints is in a short term downtrend as it has been making lower tops and lower bottoms for the last few weeks. On Wednesday, the stock corrected sharply after a recent pullback, indicating it is set to move lower in the coming sessions.
Technical indicators are giving negative signals as the stock is now trading below the 20 day and 50 day SMA. Momentum readings like the 14-day RSI too are in decline mode and not oversold, which implies potential for more downsides.
We therefore expect the stock to correct further in the coming sessions. Sell between the Rs 2,934-2,940 levels. CMP is Rs 2,937.9. Stop loss is at Rs 3,009 while downside target is at Rs 2,850.
(Mr. Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing)
