Buy Hindustan Unilever and Asian Paints, Sell Tata Motors and LIC Housing Finance – Bonanza Portfolio
Vishal Wagh, Research Head at Bonanza Portfolio recommends going long in HUL and Asian paints. Also, Vishal suggests selling Tata Motors and LIC Housing Finance.
Markets are trading strong today, Nifty is near 11750 (up 0.6%) levels while Sensex is close to 39940 (up 0.5%) levels. Vishal Wagh, Research Head at Bonanza Portfolio recommends going long in HUL and Asian paints. Also, Vishal suggests selling Tata Motors and LIC Housing Finance.
Vishal recommends buying Hindustan Unilever above 2170 with a target of Rs 2360 and stop loss of Rs 2080. The stock has given breakout from the downward sloping trend line from the highs of 29th July and 19th August this year. Post breakout stock is consolidating just above the trend line. The chart is showing a bullish higher high and higher low formation. The price is sustaining above all major moving averages. The charts of moving averages have changed from downwards to upwards. RSI is above 50 levels. Once the level of 2170 gets broken on a closing basis HUL may show a stronger rally, on the higher side stock may rally up to 2320-2360.
Vishal also likes Asian Paints. He suggests accumulating between Rs 2000- Rs 2050 range with a target of Rs 2250 and stop loss of Rs 1900.Stock is trading near 52 weeks high. Continuous higher high and higher low chart formation clearly indicates that the trend is upwards for Asian Paints. All major moving averages are sloped upward. RSI is sustaining above 50 levels. Any dip in this counter is a buying opportunity. Festival season will increase the demand for the paints, which will benefit the stock.
Vishal suggests selling Tata Motors below Rs 122 with a target of Rs 90 and stop loss of Rs 136. Stock has created a double top at Rs 155 levels and sold off till Rs 122 levels. On the bounce, it has lost its strength around Rs 145.80. In the process, it has created a lower high. On the break of Rs 122, it will create a lower low chart formation which is bearish. At the same time, 200 EMA is at Rs 126 levels. Tata motors is creating a Head and shoulder like a formation with the neckline at 122. RSI is sustaining below 50 levels and the price is already sustaining below 20 and 50 EMA. So, if Tata Motors penetrates below Rs 122 then it will be ready for a target of Rs 90.
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Lastly, Vishal recommends selling LIC Housing Finance below 275 with target of Rs 242 and stop loss of Rs 291. LIC Housing Finance is facing resistance around 200 EMA. The last couple of attempts to cross 200 EMA have failed. RSI is also moving below 50 levels. Charts of all major moving averages are downwards. It closed below 50 EMA in yesterday's trading session. Any cut below yesterday's low of 275.90 will open room for further sell off till 260-242 levels.
(Authored by Rahul Kamdar)
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