Pullback rally in Nifty likely to continue above 17500; buy ITC, M&M, Canara Bank, others for near-term gains

24 Aug , 2022 By : Monika Singh

The benchmark indices witnessed a pullback rally on Tuesday, as the NSE Nifty 50 ended 86 points higher while the BSE Sensex was up by 257 points. Among sectors, PSU Banks outperformed, rallying nearly 2.5 per cent while sharp selloff was seen in IT stocks. As a result, the IT index was corrected over 1.5 per cent. Technically, after a gap down opening the index took the support near 20 day SMA (Simple Moving Average) and bounced back sharply. It also formed a bullish candle on daily charts which is broadly positive. However, the short term formation is still on the negative side. The intraday setup suggests the pullback rally is likely to continue, if indices succeed to trade above 17500/58800. Above which, these could hit the level of 17700-17750/59300-59500. On the flip side, below 17500/58800 fresh round of selling possible. Below the same, the indices could slip till 17350-17300/58500-58300.

Technical stocks to buy

Canara Bank
BUY, CMP: Rs 229.1, TARGET: Rs 240, SL: Rs 223

After hitting the recent highs of 242, due to the supply pressure the counter plunged on the downside, however it has found support by forming double bottom chart formation. Additionally, the formation of a bullish engulfing candlestick pattern with rising volume suggests a strong up move in the counter.

ITC
BUY, CMP: Rs 315.9, TARGET: Rs 333, SL: Rs 308

The stock is trading into a rising channel pattern forming the higher lows series continuously. The strong bullish activity on the daily chart suggests that the counter is likely to maintain bullish continuation formation in the near term.

Godrej Properties
BUY, CMP: Rs 1,323.05, TARGET: Rs 1,390, SL: Rs 1,290

The counter had witnessed a quite strong sell off in the last couple of trading sessions. However, the downward movement has taken a pause at the moment. The counter has found support around its important retracement zone. As a result, the pullback rally from the current levels is expected to move up in the near future.

Mahindra & Mahindra (M&M)
BUY, CMP: Rs 1,273.1, TARGET: Rs 1,340, SL: Rs 1,245

For the past few sessions, the counter witnessed vertical slide on the downside. However, post correction a robust recovery is seen with the formation of a strong bullish candlestick pattern which hints at upward momentum to sustain in the coming horizon.