SBI Securities' Top Stock Picks: APL Apollo Tubes and HDFC AMC for This Week
Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, has identified APL Apollo Tubes and HDFC Asset Management Company as his top stock recommendations for the upcoming week. This analysis comes alongside detailed technical views on the Nifty and Bank Nifty indices, highlighting a shifting market dynamic where broader indices are taking the lead.
Nifty View: Broader Markets Outperform as Rally Continues
The benchmark Nifty index continues its upward trajectory, marking a second consecutive week of gains. However, this rally phase is distinct, with the spotlight moving away from the headline index. While Nifty closed in the green, the real strength is emerging from beneath the surface.
The broader markets have decisively taken charge, with the Nifty Midcap 100 and Nifty Smallcap 100 indices delivering robust rallies and clearly outperforming the frontline index. Both these indices have moved decisively above their key moving averages, signaling strong trend strength. In contrast, Nifty remains below its 100-day and 200-day Exponential Moving Averages (EMA). Notably, the Nifty Midcap 100 is now just a short distance from its all-time high, suggesting that the next wave of opportunity may be unfolding beyond the conventional large-cap space.
Focusing on Nifty, the index has sustained above its 50-day EMA for the last three trading sessions. The 20-day and 50-day EMAs have begun to edge higher, reflecting an improvement in the short-term trend. Meanwhile, the downward momentum in the 100-day and 200-day EMAs has slowed considerably, indicating stabilization in the medium-term structure.
Momentum indicators further support a constructive bias. The daily Relative Strength Index (RSI) is trading above the 57 mark and moving higher, while the daily Moving Average Convergence Divergence (MACD) histogram signals strong bullish momentum. Collectively, these technical factors suggest the pullback rally is likely to continue in the short term.
On the upside, the 24,650–24,700 zone is expected to act as a crucial hurdle for the index. A sustainable breakout above 24,700 could lead to an extension of the pullback rally towards 25,000, followed by 25,200 in the near term. On the downside, the 24,050–24,000 zone will serve as immediate support. As long as the index remains above the 24,000 mark, the ongoing pullback rally is likely to stay intact.
Bank Nifty View: Consolidation Ahead of Key Earnings
The banking benchmark Bank Nifty also ended the week positively, indicating the continuation of its ongoing pullback rally. However, over the last three trading sessions, the index has struggled to decisively cross its 200-day EMA, suggesting a phase of consolidation near a key long-term resistance zone. This price behavior reflects hesitation at higher levels and points towards a pause in momentum after the recent recovery.
This consolidation largely indicates caution among market participants, as investors appear to be awaiting clarity on the Q4 earnings outcomes of major banking heavyweights, namely ICICI Bank and HDFC Bank. With both results scheduled over the weekend, the index is likely to witness a directional move post the earnings announcements, depending on performance and management commentary.
From a technical perspective, the index maintains a constructive short-term setup, trading above its 20-day and 50-day EMAs, reflecting underlying strength. Momentum indicators remain supportive, with the daily RSI placed above the 55 level and trending higher, suggesting improving buying momentum and a positive short-term bias.
Looking ahead, the 57,000–57,100 zone is expected to act as a crucial resistance area, as it coincides with both the prior swing high and the 100-day EMA, making it an important supply zone. A sustainable move above 57,100 could lead to a further extension of the pullback rally towards 57,800, followed by 58,500 in the short term. On the downside, the 55,800–55,700 zone is placed as an important support band, and any dip towards this region is likely to attract buying interest as long as the structure remains intact.
Stock Recommendations: Detailed Analysis
APL Apollo Tubes
APL Apollo Tubes has demonstrated strong bullish intent following a 14.5% pullback from its early April lows near the 200-day EMA, indicating solid support at lower levels. The recent consolidation between 2,072 and 1,961 acted as a base, with the stock now delivering a decisive breakout on strong footing.
A positive Directional Index (DI) crossover on the Average Directional Index (ADX) signals clear buyer dominance, while the MACD nearing a move above the zero line with rising histogram bars points to strengthening momentum. The overall setup suggests the stock is well-positioned to extend its uptrend in the near term.
Recommendation: Accumulate the stock in the zone of 2,110–2,090 with a stop-loss of 2,020. On the upside, it is likely to test the level of 2,255 in the short term.
HDFC Asset Management Company
HDFC Asset Management Company has exhibited strong bullish momentum, closing Friday’s session with an impressive 4.89% gain. The stock has surged nearly 26% from its March lows, indicating robust buying interest.
Momentum indicators remain firmly supportive, with the RSI sustaining above 60, reflecting strength. Additionally, a positive DI crossover on ADX highlights clear buyer dominance, while rising MACD histogram bars with the MACD line above the zero mark further reinforce the ongoing uptrend. The overall structure suggests the stock is well-positioned to extend its upward trajectory.
Recommendation: Accumulate the stock in the zone of 2,800–2,770 with a stop-loss of 2,690. On the upside, it is likely to test the level of 2,990 in the short term.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
