Stocks to buy: Here is why Apollo Tyres and Wipro are attractive short-term bets
Nifty fell sharply following the downgrading of the US credit rating from AAA to AA+, leading to a breakdown from the recent consolidation on the daily timeframe. The recent fall has pulled the index below the 21-day exponential moving average (EMA) for the first time since March 29. On an immediate basis, 19,300 acted as a support. However, on the higher end, 19,566 is likely to act as a crucial resistance level. The sentiment is likely to remain weak as long as the Nifty remains below 19,566. However, a decisive move above 19,566 could take the index towards 19,700-19,750. On the other hand, a failure to move above 19,566 could trigger selling pressure.
Bank Nifty
Following a significant drop, the Bank Nifty index managed to regain some ground and concluded the day with a positive outcome. The bears demonstrated activity around the 45,200-level. A conclusive break above this level, particularly on a closing basis, could initiate further upward movement, potentially targeting levels around 45,800 or even 46,000.On the downside, a support level can be identified at 45,500. Should the index break below this support, the bears could regain control, potentially leading to more downward movements. In terms of price range, the Bank Nifty index has been fluctuating within the broad range of 44,500-45,200. A breach on either side of this range could signal a shift towards trending movements.
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Here are two stocks that look attractive:
Apollo Tyres | Recommendation: Buy | CMP: ₹437 | Target: ₹480 | Stop Loss: ₹420
The Apollo Tyres stock has given a symmetrical triangle breakout and sustained above the critical moving average. The RSI is in a bullish crossover, suggesting that the uptrend is likely to continue. On the higher end, the stock may move towards ₹480, while support is seen at ₹420.
WIPRO | Recommendation: Buy | CMP: ₹408 | Target: ₹440 | Stop Loss: ₹395
The stock has formed a morning star candlestick pattern right at the support zone, indicating a potential bullish reversal. Furthermore, the stock has broken out from its 20-day moving average (20DMA) with noticeable volumes, reinforcing the stock’s strength and potential upward momentum. For investors and traders, there is a visible support level at ₹395, likely to act as a crucial level for potential reversals. Conversely, the stock has potential upside targets at ₹425 and ₹440, implying the possibility of further price appreciation.
The author is Rupak De, Senior Technical analyst at LKP Securities
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 06 Aug 2023, 07:58 AM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.