Here's why HDFC Securities recommends buying National Aluminium, PNB

According to Vinay Rajani of HDFC Securities, metal as a sector has been outperforming for a while and technical setup of the metal index is much stronger than Nifty.

From the day’s low of 17,043, the Nifty recovered more than 200 points and ended Tuesday's session with Bullish “Hammer” candlestick pattern. It found support on upward sloping trend-line, which adjoins the previous swing lows on the daily charts. Resistances for Nifty are seen at 17,419 and 17,507, which happens to be 50 per cent and 61.8 per cent retracements of the recent downswing seen from 17,795 to 17,043. Medium term trend of Nifty would turn bearish once the support of 17,000 breaches. 

Buy National Aluminum (119) | Target: Rs 128 | Stop-loss: Rs 114

The stock has broken out from the downward sloping trend line on the daily charts. Price Breakout is accompanied by rising volumes. Primary trend of the stock has been bullish with higher tops and higher bottoms. It is also placed above all important moving averages, which indicates bullish trend on all time frames. Metal as a sector has been outperforming for a while and technical setup of the metal index is much stronger than Nifty. The stock is on the verge of registering new all-time high above 124

Buy PNB (41.90) | Target: Rs 45.80 | Stop-loss: Rs 40

Inverted Head and shoulder pattern breakout is seen on the daily chart. The stock price has broken out from the downward sloping trend line on the daily chart. Price breakout is accompanied with rise in volumes. Indicators and Oscillators have turned bullish on daily and weekly charts. PSU Bank Index has started outperforming the Nifty and Bank Nifty. The stock surpassed the 20,50,100 and 200 days EMA resistances and sustaining above it. It has also been consolidating near its neckline level post breakout, which seems to be an opportunity for initiating longs. 

Disclaimer: Vinay Rajani, Senior Technical & Derivative Analyst, HDFC Securities. Views personal