Stocks to buy- Nifty resistance at 17800-17850; charts show Sun Pharma, Britannia, others may rally

Stocks to buy: Nifty resistance at 17800-17850; charts show Sun Pharma, Britannia, others may rally

By Shrikant Chouhan

Indian stocks tumbled on Tuesday after a jump in treasury yields. Any oversupply in Treasury yields indicates a rise in commodity prices and global investors start exiting from emerging markets with a view that negative effects of the Federal Reserve’s tapering on the emerging markets. Below the 17800 level, the Nifty fell relentlessly. The Nifty touched the 17576 level during the day, which was unexpected. Bank Nifty touched the level of 37315. However, both indices recovered significantly in the last half hour of trading and closed at 17748 and 37945, respectively. Tuesday’s lowest level would be the short-term trend-setting level and below that we would see further declines.

Sun Pharmaceutical Industries BUY, CMP: Rs 775.1, TARGET: Rs 815, SL: Rs 757

On the monthly scale, the stock has presented a robust rally, after a breather of few trading sessions, it has taken a pause in the momentum within a range. Currently, the counter is trading near the lower boundary of the range which indicates reversal from current levels.

Torrent PowerBUY, CMP 503.25, TARGET 530, SL 491

The stock has presented an incredible up move in the last many months and it is trading in a Rising Channel continuously. The Higher High and Higher Low chart patterns are apparent in the counter. Therefore upward movement from the current level is very likely to remain in the near term.

Canara BankBUY, CMP 163.7, TARGET 172, SL 159

On the weekly scale, the stock is trading in an Ascending Triangle chart formation and a breakout from the pattern is very likely in the coming session for further upward movement.

Britannia Industries BUY, CMP 4003.65, TARGET 4205, SL 3920

Post strong upward rally, the stock had witnessed a gradual down move and any minor correction is seen as a buying opportunity. The stock has found support in its demand zone, hence we expect the rising trend to persist from the current levels in the short term

(Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Views expressed are the author’s own.)