 "Stocks to buy, sell: How to trade HDFC Bank, HUL, RIL shares today?")
Hindustan Unilever (HINDUNILVR)
Hindustan Unilever Limited (HUL) share price has undergone a sharp correction of 662 points, or 22 per cent, from its peak of 3,000, bringing it close to a critical support level near the previous breakout zone. This level also aligns with the S5 camarilla pivot support zone, further strengthening its significance. Additionally, the appearance of a bullish engulfing candlestick pattern in the previous trading session adds to the likelihood of a reversal.
The daily chart reveals a bullish divergence, where the price has formed three consecutive lower lows, but the RSI (Relative Strength Index) has simultaneously created three consecutive higher lows. This divergence signals a potential trend reversal, making HUL an attractive buying opportunity.
Based on these technical indicators, we recommend accumulating HUL in the 2,350–2,400 range, with a target price of 2,620. A stop-loss should be placed at 2,250 on a daily closing basis to manage downside risk.
HDFC Bank (HDFCBANK):
Historically, HDFC Bank has faced significant resistance in the 1,790–1,800 zone, with the stock reversing from this level on three to four notable occasions. This consistent rejection established the area as a critical hurdle, indicating strong supply and selling pressure. However, at the current juncture, HDFCBANK has decisively breached the 1,800 level, showcasing bullish momentum, and is now trading around the 1,870-mark.
Notably, the stock has surpassed the R4 camarilla pivot resistance, often regarded as the final line of resistance where fresh buying typically emerges to propel prices higher. Based on this development, we recommend initiating long positions in the 1,850–1,875 range, with an upside target of 2,050, near the R5 camarilla pivot resistance. A stop-loss should be set below 1,770 on a daily closing basis to manage risk effectively.
Reliance Industries (Reliance):
Reliance share price has been following a textbook Elliott Wave 5-wave structure on the daily chart since March 2023. This impulsive rally came to a decisive conclusion in July 2024, marking the end of the fifth wave and initiating a corrective ABC phase. Such corrections are typical after the completion of a 5-wave cycle and often retrace to significant Fibonacci levels.
Currently, the ongoing correction appears to be approaching a critical support zone in the 1,220-1,240 range, aligning with the 61.8 per cent Fibonacci retracement level of the entire 5-wave structure. This level holds importance as it typically serves as a strong support during corrective phases, indicating the potential for base formation. Moreover, these levels coincide with the completion of a bullish Crab harmonic pattern, further strengthening the case for a reversal.
Given this confluence of technical indicators, traders can consider initiating long positions in the 1,240-1,275 range, placing a protective stop-loss below 1,195 to manage risk. The anticipated upside target for this trade is around 1,385, offering a favourable risk-to-reward ratio as the stock is poised to resume its upward trajectory following the correction. ================= Disclaimer: This article is by Jigar S. Patel, sr. manager - equity research, Anand Rathi. Views expressed are his own.