Why HDFC Bank, Tata Motors, Indian Hotels are showing strong trends
Indian indices continued their strong momentum throughout the week and ended with a gain of 1.3% for Nifty and 1.05% for Bank Nifty. The participation was visible across the board with the highest return by NIFTY REALTY up by 4.06% followed by NIFTY PHARMA up by 2.15%. The Nifty has given a falling channel breakout on the daily timeframe, pointing towards a bullish trend reversal.
Besides, the index has closed above the critical moving average for the second consecutive day. A positive crossover in the momentum indicator RSI will boost sentiment. Going forward, the market will remain buy-on-dips as long as it remains above 17,500. On the higher end, immediate resistance is visible at 17,700; above which the index may move up towards higher levels.
Meanwhile, the Bank Nifty continued its rally on the upside, and dips were well bought. The index surpassed the level of 40,000 last week, and since then there has been a one-way rally. The index is now trading around the next resistance zone of 41000, and if it sustains above that in the upcoming week, the rally might continue to take the index towards the 42,000-mark. The lower-end support is visible at the 40,500.
Looking at stock-specific movement:
HDFC BANK has given a swing high breakout on the daily chart, suggesting a rise in bullish bets. Besides, the stock has moved above the critical moving average on the daily timeframe. The momentum oscillator RSI (14) is in bullish crossover. Over the short term, the stock is likely to move towards a higher level. On the higher end, resistance is visible at ₹1,725, above which further upside movement can happen. On the lower end, support is placed at ₹1,615.
TATA MOTORS has given a falling trend line breakout on the daily chart, suggesting a rise in optimism. Besides, the stock has moved above the 200DMA, which points towards a positive trend. The momentum indicator is in bullish crossover. Over the short term, the stock is likely to move towards ₹460. On the lower end, support is placed at ₹417.
INDIAN HOTELS is on the verge of a breakout from a big sideways consolidation range. The stock’s immediate hurdle is at ₹330, and once it surpasses this level, we will witness a sharp move on the upside towards the ₹340-350 zone. The momentum indicator RSI has also given a positive crossover on the daily chart, which confirms the strength of the stock. The lower-end support is visible at ₹318, which will act as a cushion for the bulls.
The author, Kunal Shah is Senior Technical & Derivatives Analyst at LKP Securities
Disclaimer: The views and recommendations shared by the analysts are their own and Mint is not responsible.
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http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.