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Stock Analysis, IPO, Mutual Funds, Bonds & More

HDFC Bank, ICICI Bank and Axis Bank have 8-10% upside from current levels

Nifty has closed above its key averages and faces immediate resistance at 11750 levels.

ET CONTRIBUTORS|
Oct 21, 2019, 12.22 PM IST
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Power Grid hits near 13-month high; chart points to more upside.
The index has formed a probable inverse Head & Shoulder pattern and has its neckline at 11,150 levels.
By Manav Chopra
Head Research-Equity, Indiabulls Ventures


Where are We? The Nifty last week recovered from its key support levels and managed to sustain above 11600 and formed a bullish pattern on daily charts. The index has formed strong support at 11400-11300 levels and one must maintain a buy-on-dips approach. The Bank Nifty has exceeded its weekly resistance levels and is likely to outperform in the near future.

What is in Store? The Nifty has closed above its key averages and faces immediate resistance at 11750 levels on the upside. On a decisive close above, expect the continuation of the uptrend. Momentum oscillators have generated bullish crossover which indicates a possible rally towards the 12200 and thereafter 12800 levels. The overall trend remains bullish as long as the short-term supports of 11400-11300 are held. The bank index has bounced from the key support levels and has breached its resistance line which indicates a short-term trend reversal. The Bank Index is likely to rally towards the 30200-31000 levels and we expect HDFC Bank, ICICI Bank and Axis Bank to see an upside of 8-10 per cent from the current levels.

What could investors Do? We expect the Nifty Midcap Index to show relative outperformance in the coming few weeks as most of the stocks have bounced from their oversold levels and provide a high margin of safety. Our top picks are Kansai Nerolac Paints, Deepak Nitrite and Supreme Industries, one can expect 10-15 per cent returns. Shriram Transport Finance and M&M can see a short-term rally of 8-10 per cent as they have witnessed a bullish crossover in oscillators.
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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