Growth-oriented Union budget 2021 fuelled optimism in the markets which was further spurred by better than expected Q3 corporate earnings as well as RBI’s MPC outcome that committed to ensure enough liquidity. Nifty and Sensex both in Friday’s session hit new highs of 15,000 and 51,000, respectively and ended the week to February 5, 2021 with phenomenal gains of over 9% on both the indices.
And now as the long-term market outlook looks positive and occasional profit booking cannot be ruled out, here are 2 stocks picks by HDFC Securities’ Technical Research Analyst Nagaraj Shetti:
1. CARE Ratings:
The weekly timeframe chart of CARE Ratings Ltd indicates formation of crucial bottom reversal. After the formation of reversal candle pattern during the last week at the low of Rs. 461, the scrip has staged a smart recovery. The upside in the stock price comes as a result of cluster supports like horizontal line (support line as per change in polarity) and 20 week EMA around Rs 470-475 levels. Moreover, weekly 14 period RSI is currently placed just below 60 levels. Its continuing uptrend above 60 could further strengthen upside momentum in the stock price.
There has been given a ‘Buy’ recommendation on the stock, more can be added down to Rs. 500 for an upside target of Rs. 580 in 3-4 weeks time. Stop loss should be placed at Rs. 485. Current market price of Care Ratings is Rs. 536.55 per share on the NSE.
In the last few sessions, the stock price of Trent has seen a sustainable upside momentum after considerable weakness. The downside breakout of the trend line support at Rs 630 of last week seems to have turned out to be a false downside breakout, as the stock price witnessed upside bounce and regained the lost support area in the subsequent week-as per weekly chart. On the weekly chart, a positive chart pattern such as higher highs and higher lows is being observed.
The recent swing low of Rs 585 could be considered as a new higher low of the pattern. So, one may expect further upside in the near term. The brokerage house has given a ‘Buy’ call on the scrip at a price of Rs. 678 with a target price of Rs. 750 in the next 3-4 weeks. Stop loss is recommended at Rs. 630.