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Trade Spotlight | What should investors do with AU Small Finance, Tata Communications, Greaves Cotton & Bajaj Finserv now?

Here's what Mehul Kothari of Anand Rathi Shares & Stock Brokers, recommends what investors should do with these stocks when the market resumes trading today.

January 06, 2022 / 07:29 AM IST
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The market continued its bull run for fourth consecutive session on January 5, with the Nifty50 closing above 17,900 mark for the first time since November 16. Banking & financials, Auto and Metals stocks led the rally.

The BSE Sensex rallied 367 points to close above 60,200 levels, and the Nifty50 ended above 17,900 mark with 120 points gains, while the Nifty Midcap 100 index was up 0.15 percent and Smallcap 100 index fell 0.25 percent.

Stocks that were in focus include AU Small Finance Bank and Tata Communications which were the biggest gainers in the futures & options segment. AU Small Finance Bank was up 6.7 percent to close at Rs 1,169.35, and Tata Communications jumped 5.7 percent to Rs 1,502.25.

Among others, Bajaj Finserv was the biggest gainer in the Nifty50, climbing 4.98 percent to Rs 17,988.40, and Radico Khaitan hit a fresh record high of Rs 1,294, before closing with 3.02 percent gains at Rs 1,266.75, while Greaves Cotton jumped 5.05 percent to Rs 162.15.

Here's what Mehul Kothari of Anand Rathi Shares & Stock Brokers, recommends what investors should do with these stocks when the market resumes trading today:

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AU Small Finance Bank

The larger degree chart of AU Small Finance Bank indicates that the stock is a broad range of Rs 1,400-Rs 900 since many months. The stock has made several attempts to clear Rs 1,400 mark but has failed most of the time.

At this point it time the stock is again heading towards Rs 1,400 mark. Investors should keep holding the stock with patience as if the stock surpasses Rs 1,400, then it has potential to test Rs 2,000 levels.

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Bajaj Finserv

The long term chart of Bajaj Finserv depicts that recently the stock broke away from the resistance formed by rising trend line. After the breakout, the stock went to Rs 19,000 mark and again retested the trend line near Rs 15,500 mark.

Now the stock has again turned from the trend line and is inching higher. We advise investors to hold the stock with a strict stop-loss of Rs 15,000 as below that the stock might enter bear phase for few months.

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Greaves Cotton

The weekly chart of Greaves Cotton depicts that although the stock confirmed a range breakout multiple times but then it failed to provide a follow up move. That is why it is stuck in a big range of Rs 180-120.

Currently it is approaching higher end of the range and investors should keep a track of Rs 180 level. A close above Rs 180 would open doors for Rs 240 and higher levels. On the downside, there is not much risk since the stock has started trading above 200-week's SMA (simple moving average).

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Radico Khaitan

The stock is in strong up trend and the monthly chart displays that the stock has not breached previous month's low since past 8 months.

On the contrary, there is some exhaustion in short term charts. Thus we would advise investors to hold the stock with a trailing stop-loss of previous months low. Because the moment stock breaches previous months low, it might attract fresh selling. In this case, previous month's low is Rs 1,020 and that can be a trailing stop-loss.

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Tata Communications

The daily chart of Tata Communications construes that the stock is on the verge of fresh breakout at all-time high zone. A closer above Rs 1,540 would confirm the breakout and activate the target of around Rs 1,750.

Investors should continue to hold the stock with a trailing stop of Rs 1,300 since the larger degree trend too seems very strong.

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Disclaimer: The views and investment tips expressed by investment 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.



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Sunil Shankar Matkar
first published: Jan 6, 2022 07:29 am
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