Top trading ideas by Anand Rathi: Buy Bajaj Finance, DLF, Maruti

BUY BAJAJ FINANCE | TARGET: Rs 5,150 | STOP LOSS: Rs 4,325

The recent correction in the markets dragged Bajaj Finance's from the high of Rs 5,800 towards Rs 4,400-mark, resulting in almost 25 per cent erosion in stock price from the top. Post this fall, the stock has found support at the placement of its 200-day exponential moving average (200 DEMA) which could be its demand zone. Also, we are witnessing a ‘Bullish Island Reversal’ candlestick pattern on the daily chart which is a very rare and strong pattern. Hence, traders are advised to buy the stock in the range of Rs 4,650-4,600 with a stop loss of Rs 4,325 for the upside potential target of Rs 5,150 in 3-5 weeks.

BUY DLF | TARGET: Rs 256 | STOP LOSS: Rs 230

Recently DLF witnessed a strong corrective move from the peak of Rs 330 towards Rs 230 which is a dip of over 30 per cent and this has brought the stock into an oversold zone on the daily scale. Similar to Bajaj Finance, even DLF stock has found support exactly at the placement of its 200 DEMA. In addition, we are witnessing a positive divergence in daily RSI which indicates a possibility of a bounce. Thus, traders are advised to buy the stock in the range of Rs 242-238 with a stop loss of Rs 230 for the upside potential target of Rs 256 in 1-3 weeks.

BUY MARUTI | TARGET: Rs 7,250 | STOP LOSS: Rs 6,350

The four-wheeler giant had been under a strong corrective mode for quiet some time. Now, the stock has sneaked below its 200 DEMA but on the weekly scale, it has tested its 200 week’s EMA which is a much stronger support. This support coincides with the Ichimoku cloud support. In addition, we are witnessing a bullish NEN STAR harmonic pattern in Maruti which suggests the possibility of a good risk-reward to go long. Traders are advised to buy the stock near Rs 6,650 with a stop loss of Rs 6,350 for the upside potential target of Rs 7,250 in 3-5 weeks.

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Disclaimer: Mehul Kothari is AVP – Technical Research at Anand Rathi Shares & Stock Brokers. Views are personal.