Here's why Vinay Rajani recommends buying TVS Motors, Bharat Electronics

The technical analyst from HDFC Securities expects near-term support for the Nifty at 16,300, below which it can slide to 16,000-mark.

Nifty View

The Nifty broke down below the consolidation range of 16,440-16,793, which it held for the previous six trading sessions. The Nifty also closed below its 20-day EMA support placed at 16,446. 

For the bullish trend reversal, the Nifty has to surpass the crucial resistance of 16,800 on a closing basis. On the downside, near-term support is seen at 16,300 level. Below which, the Nifty could slide towards the next support of 16,000-mark. Among sectors, the Oil & Gas, PSU and Auto are expected to outperform.

BUY

TVS Motors

Target: Rs 775

Stop Loss: Rs 724

Last close: Rs 744

The stock price has broken out from the bullish “Flag” pattern on the daily chart with rising volume. The primary trend of the stock is bullish, as stock has been holding above all important moving averages. The auto Sector has been outperforming for last couple of months. 

BUY

Bharat Electronics (BEL)

Target: Rs 256

Stop Loss: Rs 238

Last Close: Rs 245.80

After three days of running correction, the stock resumed its uptrend journey with rising volumes. The stock price has been forming higher top and higher bottom on the daily chart. PSU sector has been outperforming for the last couple of months. Indicators and oscillators like RSI, MACD and DMI have been showing strength in the current uptrend. 

(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC securities. Views expressed are personal).