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Trade Spotlight: What should investors do with Asian Paints, Apollo Hospitals & Bajaj Finance?

Bajaj Finance and Apollo Hospitals rose more than 5 percent and Asian Paints 3 percent to hit a fresh 52-week high on August 31

September 01, 2021 / 07:25 AM IST
 
 
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The Indian market closed in the green for the fourth day running on August 31, with the bulls pushing the Sensex and Nifty higher by over a percent to a new record.

The Sensex rose more than 700 points to hit a high of 57,625, and the Nifty rallied more than 200 points to go past 17,100 during the day. The Sensex finally settled at 57,188, rising 299 points, and the Nifty closed 188 points higher at 17,119.

Sectorally, buying was seen in telecom, consumer durables, utilities and infrastructure.

Stocks that were in focus included Bajaj Finance, which rose more than 5 percent to hit a fresh 52-week high. Apollo Hospitals closed with gains of nearly 5 percent and Asian Paints rose more than 3 percent. Both stocks, too, had their best day in 52 weeks.

Here's what Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, recommends investors should do with these stocks when the market resumes trading today:

Close

Asian Paints 

This counter seems to have registered a consolidation breakout as it emerged out of its trading range of 3,179 – 2,951, which lasted for 28 sessions.

Most of the move is inside the single-day price range of 2,979– 3,179 registered on July 20. Hence, for further upsides in the near term, the stock needs to consistently trade above 3,180.

In that scenario, a range breakout target towards 3,400 can be projected. On the downside, 3,100 seems to be the critical support for the short term.

Positional traders can remain long for higher targets but fresh buying is advisable only on dips around 3,150 but with a stop below 3,100.

Apollo Hospitals

From the April 2020 lows of 1,047, this counter has moved in a beautifully well-defined weekly channel, with multiple touchpoints on both supply as well as demand lines, making it a chartist delight.

The initial target can be in the 5,227–5,290 zone, which is the upper boundary of the said ascending channel.

Unless it registers a fresh breakout above the said channel, a sustainable rally should not be expected. Considering the past behaviour, we advise traders to book profits in the 5,250–290 levels.

But, a technical stop remains below 4,750 levels, which will not make the risk-to-reward ratios comfortable.

Therefore, traders should consider a trailing stop strategy by taking preceding sessions low as their stop from next Thursday.

Bajaj Finance

This counter seems to have registered a fresh breakout during August 23 session from its 78-day old ascending channel after a brief struggle around the upper boundary of the said channel.

Interestingly, this breakout, based on the width of the channel, is projecting a higher target of around 7,900.

However, it needs to sustain above 6,855 below which a short-term downswing can be expected.

Therefore, considering the strong uptrend of this counter, we advise positional traders to hold with a stop below 6,890 on a closing basis.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

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