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ONGC, Nestlé among best stocks to buy, charts show strength; check Nifty support, resistance levels

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It is crucial that the market closes above the 14450/48100 levels to maintain the upward bias

Through Shrikant Chouhan

The Indian stock market closed at the lowest point of the day on Tuesday. The market is not stabilizing at any specific level, indicating additional uncertainties in the near term. The Nifty / Sensex closed below the 14500/48300 level which would keep open the possibilities of reaching the 14400/14370 (48000/47900) levels, however, it is crucial for the market to close above the levels of 14450/48100 to keep the bias up. On the upper side, 14600/48500 and 14750/48900 would be the main obstacles. Today, while there were some profit-taking in PSU stocks on Tuesday, we believe they can easily attract follow-up buys over the next two sessions.

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CGSB
BUY, CMP: Rs 109.65, TARGET: Rs 116, SL: Rs 106

On the monthly chart, we see that after falling from 180 highs, the stock entered a correction phase, but the stock reversed after forming the strong base in its demand area and started to trade in a bullish channel. Also, breaking the current range with incremental volume activity on the daily chart indicates that the stock has good upside potential.

Canara Bank
BUY, CMP: Rs 141.35, TARGET: Rs 150, SL: Rs 136

For the past two months, the stock has been in a downward channel after hitting the double-top chart pattern around 172, then found support at previous lows and reversed sharply forming a hammer candlestick motif. Additionally, the recent formation of the Cup and Handle chart pattern over the daily period with rising volumes indicates that the near term bullish movement is very likely to persist.

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Nestlé India
BUY, CMP: Rs 16,546.6, TARGET: Rs 17,400, SL: Rs 16,200

Over the last few days the stock was trading in an upper and lower lower series chart formation and eventually the downward movement took a break on the uptrend line and it looks like the bulls have kicked into action. , moreover the stochastic technical oscillator indicates a trend reversal because it signals the oversold condition of the counter.

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Cummins India
BUY, CMP: Rs 845.3, TARGET: Rs 890, SL: Rs 825

Strong reversal formation is evident from the 820 multiple support zone, the inverted hammer candlestick formation followed by a star pattern on the weekly scale suggests a bullish momentum in the counter-arrival horizon.

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(Shrikant Chouhan is Executive Vice President (Technical Equity Research), Kotak Securities. The views expressed are those of the author.)

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