By Subash Gangadharan
While the Nifty has bounced back strongly on Monday and is holding above the 50 day SMA, it is now finding resistance at the 20 day SMA which is currently at 18050. Upside acceleration is likely in the coming week only once these 18050 levels are taken out convincingly. In this scenario, the Nifty could attempt to test the previous highs of 18384. Crucial supports to watch for weakness are now at 17697-17613.
Buy Finolex Cables
Finolex Cables has shown relative strength this week. While the Nifty index has gained 0.9%, Finolex Cables has gained a healthy 4.66%. In the process, the stock has also broken out of its recent trading range on the back of healthy 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 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 485-493 levels. CMP is 488.9. Stop loss is at 465 while targets are at 550.
Buy Relaxo Footwears
After correcting from a high of 1405 touched in early October 2021, Relaxo Footwears found support at the 1285 levels in early November 2021. These levels also corresponded to the 20 day SMA, thereby making it a strong support.
On Wednesday, the stock broke out of the recent trading range on the back of above average volumes. With the momentum readings like the 14-day RSI in rising mode and the intermediate technical set up looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 1400-1420 levels. CMP is 1412. Stop loss is at 1330 while targets are at 1600.
(Subash Gangadharan, Senior Derivative & Technical Analyst, HDFC Securities. Views expressed are the author’s own.)
