Stocks to watch: Shree Renuka, BHEL

After days of despair, a short covering rally was due and the bulls delivered in style. After a volatile first half, the markets put on a stupendous rally. Nifty closed at 4,093 up 197 points, while the Sensex shut shop at 13,665 up a whopping 703 points; the highest single day absolute gain for the index since March 25.

Technical Analyst Rajat Bose of rajatkbose.com is positive on Shree Renuka, BHEL, L&T.

Here is how Rajat Bose views the stocks on board:

On Reliance Petroleum:

For Reliance Petroleum, I am looking at a target of Rs 185 to Rs 190 and then Rs 198 to Rs 202.

On Unitech, DLF & HDIL:

Unitech fell below Rs 171. It was holding out there and fell below Rs 171. It was a big capitulation but today it has again come close to that. For DLF, the crucial level was Rs 4,40 but it fell below that and went much below that. So, if DLF crosses Rs 440 and stays above that, then you will see a good bounce in that as well.

HDIL shows maximum volatility. So, any kind of bounce either on the upside or the downside would be reflected in HDIL’s movement.

On Shree Renuka:

Renuka is already trading above Rs 113-112. There was a resistance and that has been crossed. This movement is pretty strong. I was not expecting more than 20% move in that. But this move is pretty encouraging. If it crosses Rs 119, then one can expect further upswing in that stock.

The whole sugar pack is showing strength but Renuka stands much taller than all of them. This rally is expected to continue further if it manages to cross Rs 119.  

On BHEL & L&T:

They are showing that there is likely to be a good bounceback. Let us not quibble over the fact whether it is a bear market rally or bull market correction. We can always get say about a 10-15% move on Nifty. In that case, largecaps tend to give 25-30% moves. If we can trade profitably on such large swings, we can make good money.