HCL Tech, Tata Steel, among technical stocks to buy; Nifty may fall to 13,900 in coming days

The financial and auto stocks are available at major supports and it is advisable to accumulate them with a medium to long term view. Image: Reuters

By Shrikant Chouhan

The market witnessed hefty short covering on Tuesday when it has rejected to fall below the previous lowest levels of 14250 regained the levels of 14450. Financials and auto stocks remained out-performers while IT and Pharma stocks closed on the negative territory. Retailers have added huge long positions on calls, which is suggesting that the level of 14248 would be a major support and below that we can expect a sharp decline. Based on the daily formation of Nifty, we could see the market falling to 14000/13900 (46700/46600) levels if it breaks the level of 14248. Bargain hunting is advisable between 14000/13800 (46700/46000) levels.

On the higher side, 14550/14670 would act as major hurdles and traders should search for selling opportunities around 14650 levels with a final stop loss at 14750. In the last two days, Bank Nifty has formed a Bullish Cloud cover that could act as bullish reversal formation above 32100 levels. The financial and auto stocks are available at major supports and it is advisable to accumulate them with a medium to long term view. Keep adding select Technology companies at major supports.

Technical picks are:-

Bajaj Finserv
BUY, CMP: Rs 9,806.7, TARGET: Rs 10,300, SL: Rs 9,600

Post decline from the levels of 10500 the stock went into a range-bound movement where a strong bullish activity is spotted on the lower boundary of the range. Additionally, the formation of a bullish engulfing candlestick pattern with rising volume suggests a strong up move in the counter.

Bajaj Auto
BUY, CMP: Rs 3,602.45, TARGET: Rs 3,780, SL: Rs 3,530

For the last two months, the stock has underperformed after hitting the all-time high level of 4361 and thereafter it entered into an accumulation phase near its important support area, finally, a strong reversal candlestick formation indicates resumption of a bullish uptrend in the coming horizon.

Tata Steel
BUY, CMP: Rs 879, TARGET: Rs 920, SL: Rs 860

The stock is into a bullish continuation chart pattern where every decline in the stock prices is absorbed by the bulls thus all major technical trend indicators such as MACD and ADX are strong and intact. Therefore upward movement from the current level is very likely to remain in the near term.

HCL Technologies
BUY, CMP: Rs 983.4, TARGET: Rs 1,035, SL: Rs 960

On the weekly scale, the stock faced resistance at around 1050 levels due to double top chart formation and it reversed from the supply zone. Nevertheless post decline the stock took support at its important retracement zone with incremental volume indicating reversal from current levels.

(Shrikant Chouhan is Executive Vice President (Equity Technical Research), Kotak Securities. Views expressed are the author’s own.)