Benchmark indices in trade on Thursday (December 3, 2020) opened at record fresh highs and after the small negative candle was established with lower shadow on Wednesday, there is an indication of formation of hanging man type candle pattern. And this after an ample upmove is a suggestion to remain cautious as there could be reversal of trend.
But today's move of yet another high negated the immediate negative implication. And now the instability around 13150-13200 levels implies selling pressure at the highs and one huge decline cannot be ruled out. And a resistance shall be faced at around 13150 and sustainable move above this suggest more upside for the market.
And now as the markets are likely to see a range-bound trade. Here are 2 stock picks by HDFC Securities for near term gains:
1. Indian Oil Corporation- Buy Target Price- Rs. 97
After being on the decline for last few weeks, the oil refining company saw an upmove on Wednesday and this can be considered as an upside breakout of key overhead resistance, as per change in polarity around Rs 86. Volume as well as weekly RSI indicate further upside. One can take position into the stock at a CMP of Rs. 88.35, add more on dips to Rs. 85, wait for the upside target of Rs 97 in the next 3-4 weeks. Place a stoploss of Rs 82.50.
2. CESC Ltd - Buy- PT: Rs.675
The power generation and distribution stock's weekly timeframe chart suggest a rangebound trade in the stock for the last one month. The stock is currently placed near the lower end of a channel around Rs 570-600 levels. And this channel pattern suggest that the stock price is expected to break above the immediate resistance of Rs 608-610 levels and that means an upside breakout towards the upper end of a channel around Rs 680 and more.
Buying in the stock can be made at levels Rs. 605.9 add more on dips down to Rs 580, wait for the upside target of Rs 675 in the next 3-4 weeks. Place a stoploss of Rs 560.