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Published on 23/10/2020 11:21:17 AM | Source: ICICI Direct

Gladiator Stocks - Hindustan Unilever and Bajaj Finance Ltd By ICICI Direct

Posted in Broking Firm Views - Short Term Report| #Hindustan Unilever Ltd #Bajaj Finance Ltd. #Trading Report #ICICI Direct

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Hindustan Unilever (HINLEV): Base formation at rising demand line, 52 week’s EMA offers fresh entry opportunity with favourable risk reward…

* Consumer staples stocks, after the sharp up move in March-April, have witnessed a healthy base formation in the last six months at the long term support area and are expected to resume their fresh up move

* The share price of Hindustan Unilever has formed a higher base at the long term demand line joining major lows since October 2018 and the rising 52 weeks EMA (currently at | 2094), thus offering a fresh entry opportunity with a favourable risk reward set-up

* During the current week’s trade, the stock has generated a breakout above the falling supply line joining highs of April (| 2614) and July (| 2350) signalling the current consolidation is approaching maturity and resumption of fresh up move

* The stock has already taken 28 weeks to retrace just 80% of the previous four week’s up move (| 1758-2614). A slower retracement highlights a robust price structure and higher base formation

* We expect the stock to resume its primary up trend and head towards | 2490 as it is the 80% retracement of the entire previous decline of AprilMay (2614-1902) around | 2490

Buy Hindustan Unilever Ltd @ 2130.00-2180.00 TGT 2490.00 SL 1990.00

 

Bajaj Finance (BAJFI): Base formation at 52 week’s EMA has set stage for next leg of up move with favourable risk reward

* Bajaj Finance’s share price underwent healthy consolidation, formed higher base above long term 52 week’s EMA at | 3075, paving way for next leg of up move. Hence, it offers fresh entry opportunity with favourable risk reward

* The financial space has already seen rejuvenation of upward momentum over the past few weeks. We expect catch up activity to be seen in Bajaj Finance in the coming weeks

* Over past eight weeks, it has retraced 61.8% of preceding nine weeks rally (| 2770-3750). The slower pace of retracement has helped the stock to form a strong base around | 2950, auguring well for the next leg of the up move

* Weekly MACD has been sustaining above its zero line and is currently converging towards its nine period’s average, indicating at impending acceleration of upward momentum

* In a nutshell, we expect the stock to challenge the August high of | 3750 and gradually head towards | 3830 in coming months as it is the price parity of July-August rally (| 2955- 3750) projected from September low | 3007 is at | 3802

 

Buy Bajaj Finance Ltd @ 3220.00-3270.00 TGT 3830.00 SL 2950.00

 

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