Technical stocks to watch out for on Tuesday

Bajaj Finance Ltd: After registering the high of Rs 3,556.85, the stock has entered into a corrective phase. The correction is halted near 61.8 per cent Fibonacci retracement level of its prior upward move (Rs 3,142.85-Rs 3,556.85) and it coincides with the 20-day EMA level. Currently, the stock has given an 8-day consolidation breakout along with relatively higher volumes. Further, the stock is trading above its short and long-term moving averages. The leading indicator, 14-period daily RSI, is currently quoting at 63.01 and it has given a downward sloping trendline breakout, which is positive for the stock. The ADX is reasonably good at 27.35 levels. The +DI is much above the -DI and ADX show strength in the trend. Hence, we would advise the traders to be with a bullish bias. On the downside, the 20-day EMA is likely to act as important support, which is currently placed at 3,354 level. On the upside, immediate resistance is seen at Rs 3,557 level.

HDFC Asset Management Company Ltd: The stock has formed a ‘reversal spinning bottom candlestick pattern’ as on March 25, 2020, and thereafter, witnessed a pullback rally. The pullback is halted near the 100-day EMA level. After registering the high of Rs 2,820, the stock has again marked the sequence of lower tops and lower bottoms. On Monday, the stock has given an ‘inverted head and shoulders’ like pattern breakout on the daily timeframe. This breakout is confirmed by the above 50-day average volumes. Additionally, the stock has formed an ‘opening bullish Marubozu candlestick pattern’ on the breakout day, which indicates extreme bullishness. The 14-period daily RSI is also quoting near 60 and it is trading above its 9-day average, which suggests strength in the momentum. The daily MACD stays bullish as it is trading above its zero line and the histogram is suggesting a pickup in the upside momentum. Moreover, a surge in +DI is suggesting that the trend will strengthen further. Hence, we expect the bias to remain positive as long as the stock sustains above Monday’s low of Rs 2,400 level. On the higher side, the level of Rs 2,530, followed by Rs 2,632, would be seen as the next resistance zone for the stock.

Timken India Ltd: Considering the daily timeframe, the stock has given a downward sloping trendline breakout formed by connecting swing highs from July 2020. Further, the breakout is supported by a robust volume of more than three times of 50 days’ average volume, indicating strong buying interest by the market participants. 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. The stock's relative strength index (RSI) has reached its highest value in the last 14-days, which is bullish. Also, it has managed to close above the 60 mark after a span of over one month. Technically, all the factors are currently aligned in support of the bulls. 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 996-Rs 975 and on the upside; an immediate resistance is seen at Rs 1,085 level.