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Trade Spotlight: What should investors do with Graphite India, MTNL and Magma Fincorp?

Here's what Shrikant Chouhan, Executive Vice President Equity Technical Research at Kotak Securities, recommends investors should do with these stocks when the market resumes trading on March 12:

March 12, 2021 / 08:14 AM IST
 
 
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Bulls remained in control of D-Street for the third consecutive day in a row on March 10. The S&P BSE Sensex rallied over 250 points while the Nifty50 closed just a shade below 15200.

Sectorally, the action was seen in metals, IT, healthcare, consumer durables, capital goods while profit-taking was seen in oil & gas, utilities, energy, and power stocks.

Stocks that were in focus included Graphite India, which closed with gains of over 8 percent, MTNL which was locked in the upper circuit of 20 percent, and Magma Fincorp that ended with gains 5 percent.

Here's what Shrikant Chouhan, Executive Vice President Equity Technical Research at Kotak Securities, recommends investors should do with these stocks when the market resumes trading on March 12:

Magma Fincorp:

Close

The stock has rallied over 225 percent so far in the quarter. On March 10, Magma made a fresh 52-week high of Rs 135.50. The medium-term texture of the stock is bullish but on the short-term time frame, the stock is in the overbought zone.

Daily charts and momentum indicators suggest high chances of profit-booking if it manages to close below Rs 122.

Technically, for breakout traders, Rs 120 and 125 should be the key levels to watch. The overall chart structure suggests that if the stock sustained above the same, the momentum could take the counter up to Rs 150 and Rs 165. However, a close below Rs 120 may trigger further weakness up to Rs 105.

MTNL:

On March 10, the stock rallied 20 percent. On Wednesday, the stock opened with a gap-up and quickly surpassed Tuesday’s high with strong volume activity.

Despite tepid market conditions, MTNL maintained its strong momentum throughout the day. On the short-term time frame, the stock formed a strong price volume breakout pattern.

The texture of the pattern suggests breakout action will continue in the near term if the stock succeeds to trade above Rs 20 levels.

For the swing traders, Rs 20 should be the sacrosanct level, trading above the same, we can expect an uptrend continuation wave up to Rs 25.

Graphite India:

After the strong uptrend rally from Rs 300 to Rs 500, the stock is witnessing a narrow range activity.

However, on the daily charts, the stock has formed a higher bottom series pattern along with positive SAR series on weekly charts which indicates uptrend wave is likely to continue in the near term.

In addition, on daily charts stock has formed a strong bullish candle near an important resistance level which indicates high chances of a fresh breakout in the near future.

Unless it is trading below Rs 480, positional traders can retain an optimistic stance and look for a target of Rs 550-575. Fresh buying can be considered now and on dips between Rs 510 and Rs 495 levels with a stop loss below Rs 480.

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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