Trade Spotlight: How should you trade SBI, Cholamandalam Investment, Avalon, SRM Contractors, Axis Bank, and others on Tuesday?

Cholamandalam Investment has fallen from a peak of Rs 1,650 to below the Rs 1,200 mark, entering an oversold zone. We are witnessing a reversal Morning Star pattern on the daily chart. Additionally, there is a positive divergence in the daily RSI (Relative Strength Index), suggesting a possibility of a bounce. Therefore, traders are advised to go long in the stock near Rs 1,230, with an upside target of Rs 1,330.

Strategy: Buy

Target: Rs 1,330

Stop-Loss: Rs 1,180

L&T Finance | CMP: Rs 139

L&T Finance has corrected significantly from a high of around Rs 190 and is now hovering near the support level formed by the Ichimoku system on the weekly chart. This support coincides with the previous breakout zone, which is now acting as a demand zone. Hence, traders are advised to buy the stock near Rs 138, with an upside target of Rs 148.

Strategy: Buy

Target: Rs 148

Stop-Loss: Rs 133

State Bank of India | CMP: Rs 814

SBI rallied from a low of around Rs 770 but has since corrected considerably. The stock has now retested its 200-day Exponential Moving Average (DEMA) and has reversed from there. We are also witnessing a reversal candlestick pattern, though confirmation is still needed. Therefore, traders are advised to go long in the stock above Rs 815, with an upside target of Rs 840.

Strategy: Buy

Target: Rs 840

Stop-Loss: Rs 800

Pravesh Gour, Senior Technical Analyst at Swastika Investmart

SRM Contractors | CMP: Rs 308

SRM Contractors is in a strong bullish momentum and is forming a Flag formation on the daily chart. The stock is trading above all its moving averages, and the momentum indicator RSI is positively poised. Additionally, the MACD (Moving Average Convergence Divergence) supports the current strength. On the higher side, Rs 340 is the immediate resistance; above this, the stock could target Rs 350 in the near term. On the downside, Rs 280 is an important support level in case of a correction.

Strategy: Buy

Target: Rs 350

Stop-Loss: Rs 280

Avalon Technologies | CMP: Rs 831

Avalon is emerging from a long consolidation phase with strong volume, making it look promising on the daily chart. The pattern suggests an immediate target of Rs 900, with the potential for further upside to Rs 950+. On the downside, Rs 735 is a key support level. Both MACD and RSI indicate positive momentum.

Strategy: Buy

Target: Rs 962

Stop-Loss: Rs 735

Orient Technologies | CMP: Rs 452

Orient Technologies is in a clear uptrend and has recently broken out of a triangle formation, signaling a continuation of the bullish momentum. This breakout is supported by increasing volume, and the stock has held above the breakout level even amid broader market weakness. It is trading above key moving averages, with momentum indicators showing a positive bias. On the downside, Rs 420 is a key support level, with Rs 400 as the next support in case of a dip.

Strategy: Buy

Target: Rs 500

Stop-Loss: Rs 420

Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities

Axis Bank Futures | CMP: Rs 1,128.95

Axis Bank has closed below its 200-day moving average support and is on the verge of breaking its multiple swing supports. The momentum indicator MACD has turned negative on the daily charts, and the stock is already in sell mode on the weekly charts. Thus, the overall trend is negative in the short term. On the derivatives front, the Rs 1,120 strike has the highest Put open interest (OI). If this level is broken, the stock could slide further, as there is no significant support below it. On the upside, Call open interest is concentrated at Rs 1,130, Rs 1,140, and Rs 1,170, which suggests that the upside is capped for now. Hence, below Rs 1,120, the stock is likely to trade with a negative bias and could gain further downward momentum.

Strategy: Sell

Target: Rs 1,080, Rs 1,050

Stop-Loss: Rs 1,168

Ramco Cements Futures | CMP: Rs 895.45

Ramco Cements futures have broken through multiple swing resistances with increasing volumes and open interest, indicating long positions being built in the stock. The MACD momentum indicator has also provided a bullish crossover on the daily charts, and the weekly MACD is already in buy mode. On the options front, the highest Call open interest is at the Rs 900 strike, which, if surpassed, could help the stock gain further upward momentum. On the lower side, the Rs 880 to Rs 850 strikes have good Put open interest, which will provide support at lower levels. The stock is trading just above its maximum pain level of Rs 890, which is a positive sign in the short term.

Strategy: Buy

Target: Rs 935, Rs 950

Stop-Loss: Rs 872

REC | CMP: Rs 501.85

REC has broken down below its symmetrical triangle pattern on the daily charts, a move that is clearly visible on the hourly charts. This breakdown was accompanied by an increase in volume, indicating a price-volume breakdown. The MACD indicator is in sell mode on both the daily and weekly charts, suggesting a negative outlook in the short term. The stock has seen significant Call additions at Rs 500, Rs 510, and Rs 520, while it has only Rs 500 as a support level on the Put side. A breakdown below Rs 500 will likely lead to further selling pressure in the stock.
Strategy: Sell

Target: Rs 480, Rs 470

Stop-Loss: Rs 514

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