Technical stocks to watch out for on Wednesday

Bajaj Finserv Ltd: Considering the daily timeframe, the stock has formed a sizeable bearish candle as on August 31, 2020. Thereafter, the stock is trading in the range of Rs 6,455-Rs 6,146.55 and formed a series of indecisive candles. On Tuesday, the price action formed an NR7 with an inside bar. This formation is an interesting set-up, which indicates range contraction or a period of rest, and as Toby Crabel states that after a period of rest or range contraction, a trend day will often follow. Going ahead, the important levels to watch out would be Rs 6,425 on the higher side and Rs 6,200 on the downside. A break on either side would open doors for a directional move.

Birlasoft Ltd: After registering a high of Rs 187.70, the stock has witnessed a minor correction. The correction is halted at 38.2 per cent Fibonacci retracement level of its prior upward move (Rs 101.70-Rs 187.70) and it coincides with the 20-day EMA level. On Tuesday, the stock has formed an ‘opening bullish Marubozu candle’, which indicates extreme bullishness. Further, during Tuesday’s trading session, the volume is above the 50-day average, which is a sign of accumulation. The stock is also meeting Daryl Guppy’s multiple moving averages set up rules as it is trading above both the short and long-term moving averages. Going ahead, in case the stock sustains above Tuesday’s high then it would invite further buying and it may test its recent high of Rs 187.70. On the downside, the zone of Rs 162-Rs 161 is likely to act as strong support.

Hatsun Agro Products Ltd: The stock has formed a ‘bullish engulfing’ candlestick pattern as on March 25, 2020, and thereafter, marked the sequence of higher tops and higher bottoms. After registering a high of Rs 822, the stock has witnessed correction. During this corrective phase, mostly, the volume is below the 50-day average, which suggests that it is just routing decline after a robust move. On Tuesday, the stock has given a downward sloping trendline breakout on the lower timeframe. This breakout was confirmed by the robust volume. Talking about indicators, the daily RSI, and the daily stochastic has given a positive crossover, which is a bullish sign. Martin Pring’s long-term KST set up has also given a buy signal. Hence, we would advise the traders to be with a bullish bias. On the downside, important support for the stock is placed at the zone of Rs 750-Rs 745, and on the upside; an immediate resistance is seen at Rs 822 level.