Broking firm ICICIdirect has recommended sector wise following technical picks for December:
1. State Bank of India (SBI)
'Buy' in the range Rs 2,090-2,115 for target price Rs 2,315 with stop loss Rs 2,025.
The stock has consolidated in a narrow range during the last two months after the strong up move in September 2012. The most important observation in the price chart of State Bank of India is that the stock is sustaining above its trend line breakout as seen in the adjoining monthly candlestick chart.
On the daily chart, the stock has bounced back after taking support at the lows of October 2012 (2057). Thus, a potential double bottom is placed around this support level. On the monthly chart, the long term MACD has given a bullish crossover above its signal line near its previous major lows.
2. Axis Bank
'Buy' in the range Rs 1,262-1,280 for target price Rs 1,432 with stop loss Rs 1,198.
The stock has been in a short term uptrend forming a sequence of higher peaks and troughs on the weekly and daily charts. The stock has seen a steady rise in volume when the price rose whereas price correction has seen low volumes suggesting larger participation in the direction of the larger uptrend.
The stock has given a falling channel breakout in the monthly chart joining the major peaks and trough of the last two years as can be seen in blue in the adjacent chart. Among oscillators, the MACD on the monthly chart has given a buy signal as it moves above its signal and trigger line.
Gapital Goods Sector
3. Larsen & Toubro (L&T)
'Buy' in the range Rs 1,580-1,605 for target price Rs 1,760 with stop loss Rs 1,518.
The capital goods behemoth Larsen & Toubro has been a consistent performer since May 2012. After making a good base around Rs 1200 levels, the stock has zoomed towards the Rs 1700 mark over the past couple of months. From a medium term perspective, rising peak and troughs and volume expansion alongside rallies is a sign of a strengthening uptrend.
On the weekly chart, the stock has been trading in a rising channel since August 2012 and has recently bounced back taking support at the lower band of the channel and is likely to test the higher band of the channel around 1750-1800 levels. Bullish Hammer candlestick pattern at the trend line support during the previous week’s trade further adds to the bullish view in the stock.
'Buy' in the range Rs 2,420-2,445 for target price Rs 2,655 with stop loss Rs 2,305.
On its weekly chart, Infosys has formed a higher bottom as it bounced back taking support at the 61.8% retracement of the July-September rally. On the monthly time frame, the stock has formed a Bullish Piercing line candlestick pattern near its previous lows. The stock has been an outperformer during the previous month’s trade gaining 4.5% on a monthly basis, in a market where benchmark indices traded in a narrow range.
On the weekly chart, the stock has given a given a range breakout during the previous week’s trade moving above its higher band of the recent consolidation of the last six weeks. Among oscillators, the 14 period RSI on the weekly chart is in a buy mode and the MACD on the weekly chart has given a bullish crossover over its signal line signifying the positive bias will continue in the short-term.
5. Hindustan Unilever (HUL)
'Buy' in the range Rs 531-543 for target price Rs 595 with stop loss Rs 508.
The share price of Hindustan Unilever remains in a secular bull trend, consistently forming higher peaks and troughs on the weekly and monthly price charts. During the recent correction, the stock has bounced back taking support at the 100 days EMA, which is currently placed at 515 levels.
During the recent correction in October 2012, the stock has bounced back taking support at the 38.2% retracement of the major up move from 406 to 580 levels signifying the bullish trend in the stock. In the process, the stock has also given a falling channel breakout in the weekly time frame as can be seen in the chart in blue.
'Buy' in the range Rs 382-388 for target price Rs 435 with stop loss Rs 365.
The stock has been in a short-term uptrend forming a sequence of higher peaks and higher troughs on the weekly and daily charts. The stock has been an outperformer during the previous month’s trade gaining 7.5% on a monthly basis, in a market where the benchmark indices traded in a narrow range.
The stock is likely to test the rising trend line as shown in the chart in blue. The stock has a strong support at 368-372 levels from the rising trend line and the lows of the last four weeks lows. The stock has taken support at the 21 days EMA in case of any correction during the last month. Among oscillators, the 14 periods RSI is in a buy mode and is bouncing back taking support at its nine period averages.
7. Jaiprakash Associates
'Buy' in the range Rs 90-92.30 for target price Rs 108.70 with stop loss Rs 83.
On the daily chart, the stock has given a Bullish Flag breakout on the daily chart as shown in the adjacent chart in blue. A flag is a short-term continuation pattern that marks a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance with heavy volume.
The 50 days EMA has acted as a strong support in case of any sideways consolidation during the recent times. It is currently placed at 87 levels. Among oscillators, the 14 period RSI on the daily chart is in buy mode giving a trend line breakout of its own.
8. Oberoi Realty
'Buy' in the range Rs 282-289 for target price Rs 325 with stop loss Rs 268.
The downtrend in the stock has found its feet around 200 levels at the December 2011 lows. A sharp up move from the lower levels has seen the stock forming an all-time high in late February 2012. The recent correction in the stock has taken support at the 78.60% retracement of the last major up move signifying positive bias in the stock.
On the weekly chart, the stock has also given a breakout from the falling channel as can be seen in the adjacent chart in blue. The 21 days EMA has acted as a strong support in case of any healthy corrective decline in recent times. The weekly MACD is in a rising mode and is comfortably placed above its trigger line signifying positive bias in the short-term.
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