Podcast | Stock picks of the day: Nifty likely to see a bounceback towards 11,050 –11,150 levels

If Nifty has to regain any strength, the bank index needs to step up. Hence, one needs to closely watch how banking conglomerates perform in the coming week.

The market witnessed selling pressure, which pushed the Nifty below the 10,650 marks on August 23. Fortunately, strong buying emerged at lower levels in the following hour and thereafter, the index saw a V-shaped recovery to not only trim all losses but also to enter the positive territory and reclaim the 10,800 marks.

We are trading in an extremely oversold zone and reached crucial February lows around 10,600. Technically, we can see the formation of ‘Bullish Piercing’ pattern on the daily chart (in Nifty).

The said pattern will show its significance once the index manages to sustain above 10,900. In this scenario, we can expect further recovery towards 11,050–11,150.

If Nifty has to regain any strength, the bank index needs to step up. Hence, one needs to closely watch how banking conglomerates perform in this week.

For Nifty, the support can be seen around 10,728–10,637 levels. In case of a breach, from these crucial supports, we can see an extended correction in the market.

Here is a list of two stocks that could return 5-11% in the next three-to-four weeks:

Tata Elxsi: Buy| LTP: Rs 649.25| Target: Rs 685 | Stop Loss: Rs 631 | Upside 5%

Recently, the stock consolidated for nearly three weeks after taking a strong knock of more than 30 percent in the first half of July. On Friday, we witnessed strong buying emerging at lower levels which accelerated to confirm a bullish breakout from the recent congestion zone.

The kind of volume activity we witnessed during this intraday surge, it’s quite encouraging and provides credence to the move. Going ahead, we expect a decent relief rally in this counter.

We recommend investors to buy this counter for a target of Rs 685 over the next few days. The stop loss should be fixed at Rs 631.

Bharat Electronics: Buy| LTP: Rs. 99.90| Target: Rs 111| Stop Loss: Rs 92.40| Upside 11%

On the daily chart, the stock prices for the last month were trading within a range of two crucial moving averages with 200-SMA acting as a strong base and 100-EMA acting as a stiff resistance.

Now, finally, the prices have broken from this range on the higher side by closing above 100-EMA. The said breakout is supported with sizable volumes and strong bullish candle. In addition, momentum oscillator i.e.

RSI has entered the positive zone above the levels of 50 supporting the optimistic stance. Going with all the above evidence, we recommend buying this stock at current levels for a target of Rs.111 over the next few days. The stop loss can be placed at 92.40.

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