Hot Stocks | Siemens, Berger Paints two buy calls for the short term

After one leg of lower high lower low formation, the benchmark index Nifty confirmed the failure of the bearish setup on October 6 and formed a higher high above 11,600 levels.

On October 7, Nifty witnessed a sharp rally intraday after witnessing a flat to negative opening and closed the day at 11,738.85 with a gain of 76 points, forming a bullish candle which has shown a positive thrust on the daily chart, hinting at strong bullish momentum ahead.

The current reversal is quick but is a very narrow rally. The majority of sectoral indices are contributing to the move and we feel IT, pharma, and auto could outshine others in the near future.

Due to the recent breakout in Nifty, its key technical indicators are in favour of bulls, hence our bullish view will remain intact, but due to a stellar rally, profit-booking at the current stage cannot be ruled out before reaching the 12,000 mark.

The index is nicely poised above its 20, 50, 100-day exponential moving averages (EMA) on a daily interval which is positive for the Indian bourses.

In case Nifty violates 11,550 – 11,500 levels, higher-level profit-booking will take place, where the index will find support around its trendline, placed around the 11,400-mark.

On the higher side, the index will face a major hurdle around 12,000 levels.

Here are two buy calls for the next 2-3 weeks:

Siemens | Buy | LTP: Rs 1,277.50 | Target price: Rs 1,360 | Stop loss: Rs 1,220 | Upside: 6%

On October 5, the stock managed to surpass the multiple resistance zones around Rs 1,260 –1,275, which eventually confirmed an ascending triangle pattern breakout on the daily interval.

The recent leg of strong up-move is also supported by strong volumes and it also resembles a strong consolidation breakout.

It is trading above its 50 and 100-day exponential moving averages on the daily chart. The momentum oscillator RSI (14) is reading near 60 levels with positive crossover, which is positive for the counter.

The MACD indicator is in positive crossover above the line of polarity which can be considered as the continuation of the positive trend.

Berger Paints India | Buy | LTP: Rs 607.95 | Target price: Rs 660 | Stop loss: Rs 580 | Upside: 9%

After a prolonged consolidation, Berger Paints has given a breakout of its horizontal trendline on the daily timeframe.

After forming a strong base around Rs 580, the stock has given a stellar move over the last couple of days along with the broader market recovery.

The stock has been steadily moving higher since March lows and has already given decent returns.

The strong reversal in momentum oscillator RSI (14) from 30 levels has set up a V-shape reversal and it is currently reading above 65 levels with positive crossover on the daily interval.

The stock is trading above its 50 and 100-day exponential moving averages on the weekly chart.

The MACD indicator is reading above its line of polarity with positive sentiments.

(The author is a technical analyst at Bonanza Portfolio)