Markets in a short term uptrend; buy these two stocks to pocket short-term gains

Markets in a short term uptrend; buy these two stocks to pocket short-term gains

By Subash Gangadharan

On the daily chart, we observe that Nifty has recently bounced back from the lower end of a downward sloping channel and has witnessed a smart rally over the last 3 weeks. In the process, the Nifty has crossed its previous intermediate high of 17,800, thereby reversing the recent intermediate downtrend. The Nifty could now target the next intermediate highs of 18,135 in the coming weeks. Crucial supports to watch for weakness are at 17,655-17,597.

Technical indicators are giving positive signals as the stock is trading above the 20 day SMA. And daily momentum readings like the 14-day RSI are in rising mode after recently moving above its 9-day EMA. With the intermediate technical setup too looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy. Our entry levels are between 4450 and 4520. CMP is 4505. Stop loss is at 4260 and upside targets are at 4850.

Buy: Indiamart Intermesh

Indiamart is in a healthy uptrend after recently touching a low of 4087. This week, the stock has broken out of its recent trading range and closed at a 12 month high in the process. The stock also trades above the 20 and 50 day SMA and momentum readings like the 14-week RSI are in rising mode and not overbought.

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 5300-5380 levels. CMP is 5340. Stop loss is at 4950 while target is at 5800.

(Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities. Views expressed are author’s own. Please consult your financial advisor before investing.)