Stocks To Buy: 2 Stocks To Buy Based On Technical Analysis As Suggested By HDFC Securities

Markets after the big event yesterday started on a weak note but as of writing this copy have pared most of the intra-day losses with Nifty up at 16348. Nevertheless, there is seen pain in the Bank Nifty which is down by close to half a percentage.

Amid this set-up, there are two stocks which you can bet on based on technical analysis by the brokerage firm HDFC Securities. Typically these are positional calls which you can enter into a short term of up to 3 months and make decent return.

Deepak Fertilisers

his is a small cap fertilisers major and is among India's leading producers of fertilisers and industrial chemicals. Set up in 1979 as an Ammonia manufacturer, DFPCLis a publicly listed, multi-product Indian conglomerate with an annual turnover of over half a billion USD with a product portfolio spanning industrial chemicals, bulk and specialty fertilisers, farming diagnostics and solutions, fresh produce, technical ammonium nitrate and value added real estate, which includes India's 1st & largest revolutionary concept retail destination for Home Interiors & Design.

For the 3 months timeframe, the brokerage has given a target of Rs. 870 that will likely provide gains of over 26% considering the price of Rs. 688.45 per share. Also, the stop loss suggested is Rs. 635 per share.

Technical observation:

Primary trend of the stock is positive as it is trading above its 100 and 200 day EMA.
Short term trend of the stock is also positive as it is trading above its 5 and 20 day EMA.
RSI oscillator is placed above 60 and rising upwards, Indicating strength in the current uptrend.
Accumulation is seen in the stock during last few days where volumes are higher during up days as
compared to down days.

NLC India

This is a power generation and distribution entity. For the stock, the target given out in 3 months is Rs. 90 that at the current price of Rs. 74.1, implies a return of over 21%. The suggested stop loss is Rs. 66.4 per share. Note the brokerage has listed the stock as its MTF Positional pick.

Technical observations by the brokerage:

The stock has found support near its previous bottoms and is climbing from there.
The stock has also taken support on an upward sloping trend line highlighted in
blue, indicating that the uptrend might extend towards the intermediate high.
The stock's trend has turned to the positive, suggesting that it is bullish.
Based on the technical data shown above, we advise purchasing NLC INDIA at
the CMP of 74.50 and averaging at 69 for upside targets of 80 and 90, with a
stop-loss of 66.4.

Disclaimer

The stock recommendations are those of the brokerage and individual risk-reward analysis on the stock needs to be done before entering into the above scrips.