Technical picks from Motilal Oswal: Sell BHEL, Axis Bank; Buy Infosys

Nifty Outlook

Nifty has witnessed contradicting patterns in the recent past keeping the direction un-clear. Starting with a 'Spike' followed by a 'Piercing Line' which are bullish in nature (indicating support around 7500), Nifty also formed a 'Gravestone Doji' followed by a 'Bearish Engulfing' on the upside. This concludes 8100 to be a good resistance. The lower base of 7500 is not only a short term support but also an important level below which positions should be reduced.

 

BHEL: SELL

Target : Rs 170

Stop Loss: Rs 210

 

Capital goods has been weakening on our sector rotation model. BHEL saw a breakdown from the continuation pattern indicating further weakness. BHEL could be participated on the short side with a stop at Rs 210 for a pattern target upto Rs 170.

 

AXIS BANK : SELL

Target : Rs 475

Stop Loss: Rs 529

 

The occurrence of 'Bearish Engulfing' post the pullback re-confirmed the swing resistance near Rs 530. The pattern indicates the downtrend to resume again & the stock to retest its swing low at 450. Recent setup provides a good reward to risk opportunity for fresh shorts with a stop loss above Rs 529 for a short term target upto Rs 475 followed by Rs 450.

 

INFOSYS: BUY

Target : Rs 1250

Stop Loss: Rs 1040

 

Amidst the ongoing volatility Infosys has witnessed stable price performance so far & the recent up move indicates developing momentum. Infosys could be added as a portfolio buy with a 10% to 15% upside over 1-2 months. A short term up move could be participated with a stop at Rs 1040.

Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.

Shubham Agarwal is a head of Quantitative Research, Motilal Oswal Securities

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