Buy these two stocks for near-term gains while Nifty continues to surge towards record highs

By Nagaraj Shetti

Nifty continued its up move on Wednesday amidst a range movement and closed the day decently higher by 64 points. Nifty opened on a slightly weak note, shifted into an intraday narrow range for the better part of the session. It witnessed smart upside recovery from the intraday lows in the afternoon and closed near the high. A small positive candle was formed with a minor lower shadow. Technically, this pattern could indicate a range movement in the market with positive bias. Nifty made a new all-time high of 12948.

Nifty is in a sharp uptrend and showing positive sequence like higher highs and lows on the daily chart. The sharp weakness or any reversal pattern is not unfolding at the highs and the consolidation or range bound movement is turning out to be a minor higher low of the positive sequence. This is a positive indication and one may expect further upside in the near term.

The strong overhead resistance at 12850 (ascending long term trend line, connecting rising tops, as per weekly/monthly time frame chart) has started to surpass gradually on the upside and the market has failed to show any sort of correction/profit booking at the highs. Further up move from here (above 13000/13100) could open up the next higher targets for the Nifty.

The short term trend of Nifty continues to be positive. A sustainable move above 13K levels in the next few sessions could open the next upside targets of around 13500-13600 levels in the near term. Immediate support is placed at 12800.

Stock Picks: 

Buy KNR Constructions Ltd- (CMP Rs 284.45) 

After showing a minor decline/sideways consolidation, the stock price has shifted into an upside bounce. Wednesday’s up move could be considered as an upside breakout of the narrow range movement/immediate resistance.

We observe a formation of a positive candlestick pattern as per intraday/daily/weekly time frame chart. Volume has started to rise along with the up move in the stock price. The daily RSI is showing positive indication. 

Buying can be initiated in KNR Construction Ltd at CMP (284.45), add more on dips down to Rs 272, wait for the upside target of Rs 315 in the next 3-4 weeks. Place a stoploss of Rs 265.

Buy SBI Cards & Payment Services Ltd – (CMP Rs 814.90) 

After showing a minor decline/sideways consolidation, the SBI CARDS price has shifted into an upside bounce. Wednesday’s up move could be considered as an upside breakout of the narrow range movement/immediate resistance. The short term trend seems to have turned positive.

We observe a formation of a positive candlestick pattern as per daily/weekly time frame chart. Volume has started to rise along with the up move in the stock price.

The overall bullish chart pattern of SBICARDS indicate long trading opportunity. One may look to buy as per the levels mentioned above.

Buying can be initiated in SBICARDS at CMP (814.90), add more on dips down to Rs 780, wait for the upside target of Rs 900 in the next 3-4 weeks. Place a stoploss of Rs 762.

(Nagaraj Shetti is a Technical Research Analyst at HDFC Securities. The views expressed are the author’s own. Please consult you financial advisor before investing.)