Nifty gives up four day winning streak; charts give positive signals for these two large cap stocks

By Subash Gangadharan

After rallying for the last few sessions from a low of 9,845 and testing the 200-day EMA at 10,524 on June 24, the Nifty index has made a lower top on the 15 min intraday charts. This suggests that the current uptrend is tiring and could reverse soon. The 14-day RSI too has declined today and is currently below its 9-day EMA, suggesting a loss of momentum. The uptrend would however reverse only if the 10,282 supports are broken. Downside targets in case the supports are broken are at 10,162-10,080. If the 10,282 supports hold, the Nifty could rally once again towards the recent highs.

Buy ITC between 188 and 192 (CMP is Rs.191.85)

Target: 204

Stop Loss: 186

After falling sharply for several weeks and testing the intermediate supports of 187, ITC has bounced back smartly from the 50-day SMA and broken out of its recent trading range on the back of huge volumes. This is an encouraging signal for the bulls.

Technical indicators too are giving positive signals as the stock has just closed above its 13-day SMA and the 13-day SMA also trades above the 50-day SMA. The 14-day RSI too is in rising mode. We therefore recommend buying ITC between 188 and 192. Targets are at 204, while stop loss is at 186.

Buy GAIL above 104.5. (CMP is Rs.101.4)

Target: 117

Stop Loss: 98.5

GAIL has rallied smartly from a low of 80 touched a few weeks back. The stock has since then been consistently making higher tops and higher bottoms. Today, the stock broke out of a narrow trading range on the back of huge volumes.

Technical indicators too are giving positive signals as the 13-day SMA is supporting the stock and the 14-day RSI too is in rising mode. We therefore recommend buying GAIL above 104.5. Targets are at 117, while stop loss is at 98.5.

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  • Subash Gangadharan is a Technical Analyst at HDFC Securities. Views expressed are the author’s own. Financial Express Online advises you to consult your investment advisor before investing

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