Positive on these 2 stocks and keeping a close eye on the third

Published October 16, 2018

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On Monday Nifty 50 index recovered a bit to close above 10513.00 points. Advance-decline ratio was exact 1 with equal number advances and declines. But what can we take away from this?

The broader index does not seem to be completely out of danger since it is still under its short term resistance of 10600, and just managed to close above its longer term uptrend line. Hence it needs a little more effort on the upside to gain investors their confidence back.
However, two stocks seem to be positive and rising despite dwindling market sentiment, while one is just above its support. It would be interesting to see how it is treated in coming sessions.

Divi's Laboratories Li (DIVISLAB.NS) Close: 1 299.75

Divi's Laboratories Limited is inside a rising trend channel in the medium term chart. Rising trends indicate that the company experiences positive development and that buy interest among investors is increasing. The stock has recently taken support around 1250 levels, however, there is resistance around 1391 which is also its previous high. A close above that level may initiate new buys.
The Volume balance indicator is positive, indicating that rise in price is supported by high volume and fall in price has lower volume. This is a sign of strength and supports the underlying trend. Overall the stock is assessed as technically positive in the medium term.
Investtech's outlook: Positive

Bajaj Finance Limited (BAJFINANCE.NS) Close: 2 306.20

Investors have paid higher prices over time to buy Bajaj Finance Limited and the stock is in a rising trend channel in the medium long term. This signals increasing optimism among investors and indicates continued rise in price. Short term momentum in the stock is rising and is a positive sign.
There is support around 1980 and resistance around 3000 rupees. Hence, the risk-reward ratio in the stock is favourable for the medium term.
Investtech's outlook: Positive

Housing Development Fi (HDFC.NS) Close: 1 732.90

Housing Development  Finance Corporation Limited has broken down from the rising trend channel, but does not show any clear signal for the time being. However, falling tops and bottoms make it evidently a weak stock. The stock has fallen over 15 per cent since its high of 2047. This fall has been accompanied by very high volume, resulting in a negative volume balance.
The stock is above its support of 1650 rupees. A crack down and close below this level may trigger fresh selling. On the upside, there is resistance around 1780 rupees.
The stock is overall assessed as technically slightly negative for the medium term.
Investtech's outlook: Weak negative

The analyses are based on closing price as per October 15, 2018. Maintaining proper stop loss is always recommended.