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Trade Spotlight | What should investors do with Garden Reach Shipbuilders, Swan Energy, PVR, PI Industries on Wednesday?

PI Industries has seen a gradual recovery and prices are riding above the 20-DEMA. On April 12, it saw better-than-average volumes along with an upmove hence, the short-term view remains bullish

April 13, 2022 / 06:42 AM IST
 
 
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The market extended losses for the second consecutive session on April 12, with the Nifty losing 145 points to close at 17,530, pulled down by technology, metals, FMCG, pharma and auto stocks. The Sensex closed 388 points lower at 58,576.

The correction in broader markets was even bigger. The Nifty Midcap 100 index declined nearly 2 percent and smallcap 100 slipped more than 1.5 percent.

Considering the recovery from the day's low and a support at 20-day simple moving average (17,430), the market is expected to remain range-bound, experts said.

Stocks that were in action included Garden Reach Shipbuilders & Engineers, which saw a sharp spike after a long time and hit a record high of Rs 319.35 before closing with 15.5 percent gains at Rs 313.

Swan Energy, too, hit a new high of Rs 293 before closing at Rs 272.50, up 2.7 percent.

PI Industries and PVR were among the top five gainers in the futures & options segment, rising nearly 3 percent to Rs 2,999.8, and 2.3 percent to Rs 1,922, respectively.

Here's what Ruchit Jain of 5paisa.com, recommends investors should do with these stocks when the market resumes trading today:

Garden Reach Shipbuilders & Engineers

The stock is forming a higher top, higher bottom structure and is in an uptrend. Recently, we witnessed some time-wise correction and prices have given a breakout in the early part of this week. The upmove has been supported by high volumes, which is a positive sign.

The relative strength index (RSI) oscillator is also indicating a positive momentum hence, we are expecting a continuation of the uptrend in the short term.

Traders with existing positions can continue to ride the trend, while any dips towards Rs 300-290 should be used as a buying opportunity. The potential targets for the stock are seen around Rs 330 and Rs 360 as per the retracement theory.

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Swan Energy

The stock has rallied sharply in last month and prices have reached the 127 percent retracement level of the previous corrective move on the long term charts. Due to the recent rally, the momentum readings have now reached the overbought zone.

Usually, when prices trade near resistance and momentum readings are overbought, it leads to either a short-term price or time-wise corrective phase.

Hence, we advise short-term traders to book profits on long positions at the current juncture and wait for a better risk-reward set up for a fresh entry. Immediate supports are placed around Rs 240 and Rs 220, while resistance is seen in the range of Rs 280-300.

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PVR

The weekly chart structure indicates a higher top, higher bottom structure and the stock is in an uptrend. However, the stock is trading in a 'Rising Channel' and prices are near the higher end of the channel.

Since there are no signs of reversal, traders with existing positions can hold by following a trailing stop-loss method while one waits for some correction for fresh entry and looks to enter on dips near supports.

Immediate supports are placed around Rs 1,835 and Rs 1,710, while Rs 2,000 and Rs 2,080 are the resistances to watch for.

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PI Industries

The stock has seen a gradual recovery from the recent swing low and prices are riding above the 20-day exponential moving average support. On April 12, we witnessed better than average volumes along with the price upmove and hence, the short-term view remains bullish.

The ‘RSI Smoothened’ oscillator is hinting at a positive momentum and traders should look to trade the stock with a positive bias.

Traders can buy the stock around the current market price of Rs 3,000 with a stop-loss placed below Rs 2,765 for probable targets of Rs 3,230 and Rs 3,400 in the next few weeks.

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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.
Sunil Shankar Matkar