Nifty outlook & stock picks by Sacchitanand Uttekar: Buy ITC, DHFL

Nifty outlook & trading ideas by Sacchitanand Uttekar, AVP – Technical (Equity) at Tradebulls:
 
Nifty Outlook:
 
Nifty maintained its momentum throughout the week post the rebound from the expected support zone. The sequence of higher highs followed by higher lows has been maintained well so far. The breakout from the continuation pattern near 9200 indicates price targets upto 9,400-9,480. Hence we expect the up move to witness a final leg towards the said levels before the up move terminates & hence a trail stop strategy could be prudent so long as 9,250 is not breached.
 

Stocks:
 

ITC - BUY
Stop Loss:  Rs 270
Target: Rs 310
 
On the weekly scale ITC saw a breakout from the ‘Cup & Handle’ formation in the early part of FEB 2017. The pattern indicates an initial price target upto 310. The recent consolidation on the immediate scale seems mature for a fresh upmove. Fresh longs could be initiated with a stop below 270.
 
DEWAN HOUSING FINANCE CORPORATION – SELL
 
Stop Loss:  Rs 438.5    
Target:  Rs 400
 
DHFL has been quoting near its life high levels. The recent convergence of the RSI momentum oscillator above the overbought territory warrants caution. On the daily scale the occurrence of a Doji supports the overstretched upmove. Therefore we expect some cool off in the ongoing bullish momentum & a breach below 420 could trigger a corrective move. Traders could utilized this opportunity to trade the corrective with a stop above 438.50 for a target upto 400.

Disclaimer: The analyst may have positions in any or all the stocks mentioned above.