Markets remain in an uptrend, not in overbought territory yet; BPCL, Rallis among stocks to buy

On the daily chart we observe that Nifty remains in a short term uptrend. The index has been continuously making higher tops and higher bottoms for the last several sessions after taking out the previous swing high of 18,887. With the 14-week RSI at 70.4 and not extremely overbought, we expect Nifty 50 to continue its upward journey. Short term sell offs are however not ruled out. Crucial supports to watch for a short term trend reversal are at 19,300.

The below picks are for the next 15-26 trading sessions:

BPCL: Buy

After making a double bottom pattern around the 288 levels in October 2022, BPCL has been consistently rising over the last few months and making higher tops and higher bottoms in the process. This week, the stock also broke out of its recent trading range on the back of healthy volumes, indicating it is set to move higher in the coming weeks. 

Technical indicators are giving positive signals as the stock is trading above the 20 and 50 day SMA. Momentum readings like the 14-day RSI too are in rising mode and not overbought, which implies potential for further upsides.

With the intermediate technical setup looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between the 383-387 levels. CMP is 385.9. Stop loss is at 352 while target is at 430.

Rallis: Buy

Rallis has shown relative strength this week. While the Nifty has gained 1.18% this week, Rallis has gained a whopping 6.95%. In the process, the stock has closed above its recent trading range on the back of above average volumes, which augurs well for the uptrend to continue.

Technical indicators are giving positive signals as the stock is trading above the 20 and 50 day SMA. Momentum readings like the 14-week RSI too are in rising mode and not overbought, which implies potential for further upsides. With the intermediate technical setup looking attractive, we expect the stock to move up towards its previous intermediate highs in the coming weeks. Buy between the 208-212 levels. CMP is 210.8. Stop loss is at 196 while target is at 240.

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