Technical calls from HDFC Securities: Buy SAIL, Grasim Industries

Nifty outlook and top trading ideas by Vinay Rajani - Technical Analyst, HDFC Securities.

Uptrend intact; remain bullish with 11,450 stop loss in Nifty

The target, for the Nifty in the current bull run, could be as high as 12,430, which is 138.2 per cent Fibonacci retracement of the entire swing seen from 11,760 (Aug 2018 High) to 10,004 (Oct 2018 Bottom). However, this bull run could witness corrections on regular intervals, subject to the overbought conditions. We believe that our markets are still not overbought, as weekly relative strength index (RSI) for Nifty is still at a fair distance from the overbought zone.

Markets are not overbought, they are in continuation of a bullish trend. Rally can extend towards new all-time high and beyond. Running corrections should be bought in to. Supports for Nifty is seen at 11,450. Immediate resistance for Nifty is seen at 12,000.

BUY SAIL (Rs 56.15)

TARGET: Rs 66

STOP LOSS: Rs 51

Bullish inverse head and shoulder pattern is seen on the daily charts. The stock price has reached above its 50 and 100 day-EMA. Oscillators and indicators have turned bullish on the weekly charts.

Considering the technical evidence discussed above, we recommend buying the stock between CMP and Rs 53.5 for the target of Rs 66, keeping a stop loss at Rs 51 on a closing basis.

BUY GRASIM (Rs 845.50)

TARGET: Rs 935 

STOP LOSS: Rs 797

The stock has formed the bullish Inverse head and shoulder breakout on the daily charts. Downward sloping trendline breakout on the daily charts. Bullish Flag Pattern breakout on the daily charts. 20 day-EMA has crossed over 50 day-EMA, indicating a bullish trend.

Considering the technical evidence discussed above, we recommend buying the stock at CMP and average it at Rs 820, for the target of Rs 935, keeping a stop loss at Rs 797 on the closing basis.

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