Trade Spotlight: How should you trade Hero MotoCorp, SBI Card, IOC, Kalyan Jewellers, DOMS, and others on Tuesday?

Hero MotoCorp has broken out from a falling channel, signaling a reversal of the trend from up to down. This breakout suggests the completion of a zigzag corrective pattern. Since the previous fall was not an impulse wave, the probability of an upside is high. The momentum indicator MACD (Moving Average Convergence Divergence) has entered buy mode on the daily charts, indicating a potential reversal from down to up.

From a derivatives perspective, the stock is trading well above its maximum pain and modified maximum pain levels of Rs 5,500 and Rs 5,544, respectively. The PCR (Put Call Ratio) is at 0.63, suggesting heavy call writing at higher levels, mainly at the Rs 5,600 strike. Once this resistance is cleared, it will further strengthen the upward momentum. The stock has seen significant long buildup recently and has generally witnessed long positions since the July series, indicating a bullish short- to medium-term trend.

Strategy: Buy

Target: Rs 5,745, Rs 5,900

Stop-Loss: Rs 5,445

SRF | CMP: Rs 2,590.3

SRF has been trending higher within an upward-sloping parallel channel. It recently broke out from a symmetrical triangular pattern, indicating continued upward movement. The MACD has provided a bullish crossover on the daily charts, and the weekly momentum is already bullish. From a derivatives perspective, the stock has seen significant short-covering; initially in August, there were heavy short positions, which have now been covered, and some long buildup is evident. A range breakout is anticipated, potentially leading to a sharp short-term upmove. Options data suggests that once the Rs 2,600 strike level is surpassed, there is no major hurdle from Call writers.

Strategy: Buy

Target: Rs 2,700, Rs 2,800

Stop-Loss: Rs 2,500

SBI Cards and Payment Services | CMP: Rs 744.35

SBI Card has formed a double bottom pattern on the weekly charts. After breaking out from a falling trendline, the stock entered consolidation mode before signaling a potential trend reversal from down to up. The MACD is in buy mode on both the daily and weekly charts, with significant positive divergence indicating a likely reversal. From a derivatives viewpoint, the stock is trading well above its maximum pain and modified maximum pain levels of Rs 730 and Rs 734, respectively. The PCR is 0.64, mainly due to heavy Call writing at Rs 750 and Rs 800 strikes. However, above Rs 750, there is no major resistance until Rs 800.

Strategy: Buy

Target: Rs 800, Rs 825

Stop-Loss: Rs 721

Anshul Jain, Head of Research at Lakshmishree Investment & Securities

Radico Khaitan | CMP: Rs 2,010.5

Radico Khaitan has given a bullish breakout from a 38-week-long flat base, signaling a strong upward move. The stock surged above the crucial Rs 2,000 level with significant volume, indicating strong buying interest. During the base formation, volumes were subdued, but the breakout saw a noticeable increase in trading activity, highlighting the stock's momentum. Radico Khaitan has consistently respected its 10-week or 50-day moving average, reflecting a robust technical setup. Investors can consider buying around Rs 2,010 with a closing stop-loss below Rs 1,940, targeting an immediate upside towards Rs 2,200. The stock's technical indicators suggest further gains, making it a promising opportunity for short-term traders.

Strategy: Buy

Target: Rs 2,100, Rs 2,200

Stop-Loss: Rs 1,940

Indian Oil Corporation | CMP: Rs 178.73

IOC is currently displaying a bullish Cup-and-Handle pattern on its daily chart, which has been forming over the past 145 days. This well-known technical pattern often signals the potential for a strong upward breakout. While the overall volume during the pattern's formation has been low, significant up days have seen heavy trading volumes, indicating a clear accumulation phase. This suggests that institutional investors or large traders are gradually building positions in anticipation of a breakout.

For traders, IOC presents a compelling opportunity. It is a preemptive buy at the current market price of Rs 179, with the option to add more on a confirmed breakout above Rs 184. The stock has the potential to rally towards Rs 220, offering a promising upside. To manage risk, a closing stop-loss should be placed below Rs 164. The combination of the Cup-and-Handle pattern with strong volume on up days highlights a favourable setup for bullish traders, making IOC a stock to watch closely in the coming days.

Strategy: Buy

Target: Rs 184, Rs 220

Stop-Loss: Rs 164

Aditya Birla Capital | CMP: Rs 227

Aditya Birla Capital has recently broken out of a 21-day-long Cup-and-Handle pattern on its daily chart, signaling a potential bullish move. Notably, this Cup-and-Handle formation is positioned at the right end of a double bottom pattern, providing additional strength and credibility to the breakout. Double bottom patterns are often seen as powerful reversal signals, and their confluence with the Cup-and-Handle formation suggests a robust technical setup for the stock.

Investors might consider buying ABCL at the current market price of Rs 227. To manage risk, a closing stop-loss below Rs 218 is advisable. The immediate target is Rs 245, representing the neckline of the double bottom. A breakout above Rs 245 could propel the stock towards Rs 275, offering significant upside potential in the short term.

The combination of these bullish patterns, supported by the recent breakout, makes ABCL an attractive opportunity for traders and investors looking to capitalize on technical strength. With a well-defined risk-reward ratio, ABCL is poised to capture attention in the market.

Strategy: Buy

Target: Rs 245, Rs 275

Stop-Loss: Rs 218

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

Kalyan Jewellers India | CMP: Rs 640

Kalyan Jewellers is in a classical uptrend and has witnessed a breakout of an ascending triangle formation, resuming its uptrend. The breakout coincides with rising volume, and the stock has managed to sustain above the breakout level. It is trading above its key moving averages with positive momentum indicators. On the downside, Rs 590 will act as strong support, while on the upside, Rs 700 is a psychological hurdle. Above this level, Rs 740 will be the next target in the near term. The stock is respecting its key moving averages, reflecting strong trend strength.

Strategy: Buy

Target: Rs 700, Rs 740

Stop-Loss: Rs 590

Piramal Pharma | CMP: Rs 195

Piramal Pharma has seen a strong multi-month breakout above Rs 182 and a breakout from a long consolidation above Rs 193.50 with strong volume. On the upside, Rs 200 acts as a psychological level; above this, we can expect a move towards Rs 220+ in the shorter to longer term. On the downside, Rs 180 serves as important support during any correction. The MACD supports the current strength, while the RSI (Relative Strength Index) is also positively poised.

Strategy: Buy

Target: Rs 200, Rs 220

Stop-Loss: Rs 180

DOMS Industries | CMP: Rs 2,658

DOMS has experienced a strong volume breakout of an ascending triangle formation, retested its previous breakout level of around Rs 2,470, and begun a new rally. The overall structure is in a classical uptrend, as the stock is trading above all important moving averages. On the upside, the Rs 2,800 level operates as a key resistance; above this, we can anticipate a move towards Rs 2,900+ in the shorter to longer term. On the downside, Rs 2,450 acts as crucial support during any pullback. Most momentum indicators are positively poised.

Strategy: Buy

Target: Rs 2,800, Rs 2,900

Stop-Loss: Rs 2,450

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