On the daily chart, we see that the Nifty remains in a downtrend despite the bounces seen in the last two sessions.
Over the last few weeks, the Nifty has been in correction mode. The downtrend was confirmed when the support of 17613 was broken. On daily chart, we see that Nifty remains in a downtrend despite the bounces seen in last two sessions. The index continues to make lower tops and lower bottoms for the last few weeks. The 20 day SMA also continues to trade below 50 day SMA, indicating a negative moving average crossover. Weekly momentum readings like the 14-week RSI are in decline mode.
While we remain open to pullback rallies, we expect the Nifty to eventually move lower in the coming sessions. A larger correction is likely once the 16782 supports are broken.
The below picks are for the next 15-26 trading sessions
Buy Cummins
Cummins has shown relative strength this week. While the Nifty index has gained 0.94%, Cummins has gained a healthy 4.76%. In the process, the stock has also broken out of its recent trading range on the back of healthy volumes.
Technical indicators are giving positive signals as the stock trades above the 20 day SMA. Daily momentum indicators like the 14-day RSI too have bounced back and are in rising mode now, which augurs well for the uptrend to continue.
With the intermediate technical setup looking positive, we believe the stock has the potential to move higher and take out its previous intermediate highs in the coming weeks and therefore recommend a buy between the 912-920 levels. CMP is 916.9. Stop loss is at 870 while targets are at 1020.
Buy Tata Motors
Tata Motors is in an intermediate uptrend as it continues to make higher tops and higher bottoms over the last several months. After correcting recently and finding support at the 50 day SMA, the stock bounced back this week on the back of decent volumes.
Technical indicators are giving positive signals as the stock trades above the 50 day SMA. Daily momentum indicators like the 14-day RSI too have bounced back and are in rising mode now, which augurs well for the uptrend to continue.
With the intermediate technical setup looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 475-480 levels. CMP is 477.75. Stop loss is at 455 while targets are at 530.