Stock picks from Motilal Oswal Securities; buy Bajaj Auto, Asian Paints

Here are a few trading ideas from Shubham Agarwal of Motilal Oswal Securities:


Nifty saw a strong rebound from the immediate support of 7,500 as it resumed its up move. It breached above the oscillating range of 7,750-7,500 with a 'Run Away Gap' reinstating the bullish momentum. A sustained price action could further extend the momentum & push it beyond 8,000. Only a breach below 7700 (Run Away Gap) would stall the momentum & push Nifty within a broad trading range of 7,500-8,000. Short term traders could initiate longs on dips to 7,800 with trading stop placed at 7,700 and immediate target of 8,000.
Reco: BUY
Last Close: Rs 2,490
Target: Rs 3,100

Bajaj Auto saw a rebound from its long term support. Positive sector outlook, fresh breakout from the consolidation and pull back to support point indicates momentum to accelerate in the coming weeks. Bajaj Auto could be accumulated with a stop at Rs 2,410 for a potential pattern target upto Rs 3,100.
Reco: BUY
Last Close: Rs 887
Target: Rs 910

Asian paints has been oscillating within the trading range of Rs 850-Rs 900. The occurrence of a ‘Bullish Engulfing’ formation at the lower end of the range re-confirmed the support & augurs well for a through back move towards Rs 900. The setup provides a good reward to risk opportunity for fresh longs with a stop below Rs 878 & a pattern target upto Rs 910.
Reco: SELL
Last Close: Rs 205.50
Target: Rs 195

Buying Climax indicating exhaustion & likely termination of the pullback move. Negative divergence on the RSI augurs well for exhaustion. DHFL could be short sold with a stop above Rs 210 for a trading target upto Rs 195.

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.Motilal Oswal Securities Limited is registered under SEBI (Research Analysts) Regulation 2014 SEBI Registration No :-INH000000412. 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