Market Trading: Bharti Hexacom, Asian Paints Among Key Stock Picks for Tuesday

Indian stock markets ended Friday on a strong note thanks to foreign developments that served to bolster investor sentiment. A development back home in which the Reserve Bank of India clarified its recent stance on the health of the country's banking system, in favoring the banks, combined with the stateside news of tariffs that won't affect most of their exports, accounted for the massive gains among all sectors. 

The BSE Sensex surged 1,310 points to finish at 75,157; while the Nifty shot up 429 points to finish at 22,829. Even with the positive close, analysts are cautiously optimistic. Rupak De of LKP Securities noted that the Nifty had trouble holding above the 21-day EMA, which is a potential resistance point near 23,000. If the Nifty can break above that level, De believes it has room to run toward 23,500. However, if the index falls back below 22,750, bearish sentiment may return.

Stocks to Watch: Bharti Hexacom, Medplus, NTPC

Bharti Hexacom is on analysts' radars because it is breaking out above important areas of resistance on the daily chart. Currently, it is executed at INR 1,504.75, and the recommendation is to target INR 1,580 with a stop-loss at INR 1,465. If the stock moves above the immediate resistance at INR 1,515, we will be looking at much more bullish price action with an upside potential to INR 1,600.

Medplus Health Services is also showing strength following a symmetrical triangle breakout. The price has recently closed above INR 780 with a bullish candlestick formation that was backed by rising volumes. Currently marked at INR 789.20, the stock has an upside target of INR 875, while a stop loss is advised at INR 760.

NTPC is another selection, selling at INR 360. Technical indicators show a trend reversal as the stock approaches its 200-day moving average. If the uptrend continues, short-term price targets expect to push NTPC up to INR 430, with longer-term potential to reach INR 480. A stop loss is recommended at INR 330.

Avoiding Weak Links: Asian Paints and Sun Pharma

Although a few stocks seem ready to rise, others are looking weak. Take for example Asian Paints. Bearish engulfing candlestick patterns are a clear indication that a bullish trend has come to an end and a bearish trend is taking over. The daily chart for Asian Paints clearly shows such a pattern. Moreover, the stock is trading below its 10-day EMA, signaling more bearish moves ahead. If it breaks below INR 2,390, there is a good chance it could hit INR 2,300. A stop loss near INR 2,446 is recommended.

Sun Pharmaceuticals is under pressure after contending with the 50-day EMA and falling below the 21-day EMA. A bearish RSI crossover suggests a move downward toward INR 1,630. If prices break below INR 1,685, further weakness could follow. A stop loss at INR 1,715 is advised.