DLF, Bajaj Auto are top two technicals picks by ShareKhan for June 4

DLF

The stock was in a consolidation mode since April, 2024. The consolidation has taken form of a falling wedge pattern. The stock has broken out of that wedge pattern on the upside indicating resumption of next leg of the up move. The daily momentum indicator has a positive crossover which is a buy signal. 

The breakout has been accompanied with above average volume indicating strong hands entering the stock which is likely to support the up move. Thus, both price and momentum indicators are pointing towards resumption of the up move. 

We expect the stock to move towards 917 which is the previous swing high and beyond that it can stretch towards its previous all-time high of Rs 968. One should place a Stop Loss of Rs 835 for the long positions.

Bajaj Auto

Bajaj Auto has been trading in a range since the past couple of months. The range of consolidation has been Rs 9300 – 8600. The stock has broken out of this consolidation on the upside suggesting breakout and resumption of the next leg of up move. 

The daily Bollinger bands have begun to expand indicating expansion of range and with prices trading along the upper band suggests that the positive momentum is likely to continue. 

The daily momentum indicator has a positive crossover which is a buy signal. Thus, resumption of uptrend provides a good entry point with a favourable risk reward ratio. On the upside we expect the stock to Rs 10,000 and beyond that Rs 10,500 from a short term perspective. One should keep a stop loss of 8900 for the long positions.

(Jatin Gedia is a technical research analyst at Sharekhan by BNP Paribas. Views expressed are his own)