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Buy these two stocks for near-term gains while Nifty attempts to test 18250-18300 levels


Stock to buy
(Image: REUTERS)

By Subash Gangadharan

After consolidating for the last few sessions, the Nifty has broken out to new life highs on Wednesday. Zooming into the 60 min chart, we can see that the index is holding above a rising 20 and 50 period MA indicating that the uptrend looks set to continue.

RSI momentum readings too are not overbought on both the 60 min and daily chart timeframes, which is encouraging.  The Nifty could attempt to test the 18250-18300 levels in the coming sessions.

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

Buy Tata Consumer Products

Tata Consumer Products has shown relative strength this week. While the Nifty index has gained 1.5%, Tata Consumer has gained a healthy 4.03%. In the process, the stock has also broken out of its recent trading range on the back of above-average volumes.

Technical indicators are giving positive signals as the stock trades above the 20 and 50 day SMA. Daily momentum indicators like the 14-day RSI too have bounced back and are in the rising mode now, which augurs well for the uptrend to continue.

With the intermediate technical setup looking positive, we believe the stock has the potential to move higher and take out its previous intermediate highs in the coming weeks and therefore recommend a buy between the 845-855 levels. CMP is 851.75. Stop-loss is at 810 while targets are at 945.

Buy Cholamandalam Investment and Finance company

After correcting from a high of 601 touched in April 2021, Chola Finance found support at the 470 levels in August 2021. These levels also corresponded to the 200 day EMA, thereby making it a strong support.

The stock has bounced back well in the last few weeks from these supports and has made a higher bottom. The stock is trading above the 20 and 50 day SMA and momentum readings like the 14-day RSI too are in the rising mode, which is encouraging.

With the intermediate and long term 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 590-600 levels. CMP is 596.5. Stop-loss is at 570 while targets are at 660.

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

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