1 Tyre And 1 Bank Stock To Buy As Recommended By HDFC Securities

After seven days' of gains and record highs seen on the Nifty and Sensex, there has been seen correction for 2 days. Now as the near term outlook remains robust given the strong influx of liquidity, HDFC Securities has suggested two technical picks for a short term buy for gains of between 19-27 percent.

Here are the 2 listed stocks as a 'Buy' along with the rationale:

1. Karnataka Bank:

 The brokerage sees a target of Rs. 90 i.e. an upside of almost 27 percent from the current levels of Rs. 71.2 per share. The stop loss suggested is Rs. 65, while the stock is a buy for 3 months time.

Technical observation:

Stock price has broken out from the downward sloping trendline on the daily chart with higher volumes.

Stock price is forming bullish higher top higher bottom formation on the daily chart.

Short- and medium-term trend of the Stock is positive where it is trading above its 5,20 and 50-day EMA

Oscillators like RSI and MFI is placed above 60 and rising upwards, Indicating strength in the current uptrend.

Plus, DI is trading above -DI while ADX line has started sloping upwards, indicating stock is likely to gather momentum in the coming days.

Considering the Technical evidences discussed above, we recommend buying KTKBANK at CMP of 73 and average at 68.5 for the upside targets of 82 and 90, keeping a stop-loss at 65.

2. JK Tyre:

The brokerage has suggested a target price of Rs. 192, implying an upside of over 19 percent. The stock last traded at a price of Rs. 161.25. The stop loss is Rs. 142.

Stock has broken out from Symmetrical triangle on the daily charts Price breakout is accompanied by higher volumes
Stock has been consolidating for last 11 weeks Tyre stocks have started outperforming from last one week.
Nifty Auto Index has broken out on the medium term charts.
Primary trend of the stock has been bullish with higher tops and higher bottoms Stock has been holding levels above its medium to long term moving averages.

 

Disclaimer:

The above stocks to buy are picked from the report of HDFC Securities. Please note investing in stocks is subject to market risks and one needs to be cautious at this point of time as markets have gone-up sharply. Neither the author, nor Greynium Information Technologies Pvt Ltd would be responsible for losses incurred based on a decision made.