Trade Spotlight: What should investors do with Havells India, SBI Life Voltas & RIL?

Stocks like Havells India rose more than 11 percent, Voltas gained nearly 5 percent and Reliance Industries closed with gains of 2 percent ahead of results on 22 January. These were some of the stocks in focus on January 21.

January 22, 2021 / 08:15 AM IST
 
 
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Indian market witnessed profit-taking on a day when Sensex hit Mount 50K while Nifty50 surpassed 14700 levels.

The S&P BSE Sensex closed in the red after hitting a record high above 50,000 for the first time at 50,184 while the Nifty50 closed below 14600 on Thursday.

The S&P BSE Sensex fell 167 points to 49,624 while the Nifty50 was down 54 points to 14,590 on January 21.

Sectorally, the action was seen in consumer durables, capital goods while profit booking was visible in telecom, metals, realty, public sector, and oil & gas.

Stocks like Havells India rose more than 11 percent, Voltas gained nearly 5 percent and Reliance Industries closed with gains of 2 percent ahead of results on 22 January, were some of the stocks in focus on January 21.

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We have collated views of experts on what investors should do when the market resumes trading on January 22:

Expert: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities

Havells India: Trend deciding level Rs 1085

On Jan 21st the stock made yet another all-time high of 1147. The stock has already rallied by nearly 25 percent so far in January. The important point to note is that the stock not only surpassed its previous 52-week high of 855 but posted a breakout within a very short period of time as it rallied from 850 to 1147.

On the daily as well as weekly charts, the stock has formed a breakout continuation pattern which is grossly positive for Havells India.

However, in the short term time frame, the momentum indicators indicate that the stock is in an overbought zone and there are high chances of a quick short term price correction that can’t be ruled out if the stock trades below 1085.

For the next few trading sessions, 1085 should be the trend decider level for the bulls, and if it sustains above the same, then we can expect a continuation of the uptrend up to 1200.

Further, the uptrend may also continue which could lift the stock up to 1335. On the flip side, dismissal of 1085 could possibly trigger quick short term correction up to 1025-1000.

Voltas: 940 and 930 should be the sacrosanct levels

The stock has rallied over 5 percent on January 21st. On Thursday, the stock opened with a gap-up and quickly surpassed the 940 resistance mark with strong volume activity.

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

The texture of the pattern suggests that the breakout action will continue in the near term if the stock succeeds to trade above the 940 level.

For the swing traders, 940 and 930 should be the sacrosanct levels. We can expect the uptrend to continue up to 990-1020 if it trades above 930-940 levels.

Reliance Industries: Upside likely to continue

Post the medium-term correction, the stock was hovering between 1800 to 2000 price ranges.

After a long time on the weekly charts, the stock has formed a strong bullish candle along with modest volume activity that clearly suggests high chances of a fresh uptrend from the current level.

In addition, after a long time Reliance Industries managed to close above 100-Days SMA which is broadly positive and the texture of the chart suggests that the uptrend will continue if it succeeds to trade above the same.

For the trend following traders 2050 -2025 should be the key level to watch. Above the same uptrend wave expected till 2150. Further upside may also continue which could lift the stock up to 2225.

Note: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

Expert: Vikas Jain, Senior Research Analyst at Reliance Securities

Britannia Industries: Buy| Target: Rs 4050

The stock is trending above its 200-day average and we expect a strong breakout from the current levels. The RSI has moved higher from its lower range.

The risk-reward appears to be favorable at the current levels. In case of any decline, the stock will find strong support at around Rs3,245 which could be the Stop Loss.

Muthoot Finance: Buy| Target: Rs 1325

The stock has completed its corrective action from the recent high of 1405 levels and holding its band of averages. The daily RSI is trading above the lower band and confirms for a reversal from current levels

There are multiple support levels in the range of 1130-1140 levels that would be protected. A stop-loss can be placed below Rs 1115.

SBI Life: Buy| Target: Rs 1025

Over the past few months, the stock has been making higher tops and higher bottoms on weekly charts. Recently, the stock has witnessed minor pullback near to its short-term averages from the recent high.

This gives an opportunity to add longs, as the stock is expected to scale all-time high over the next few weeks. In case of decline, the 200-day average (which is placed at Rs818) would act as reversal point (Stop Loss) on 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.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
Kshitij Anand is the Editor Markets at Moneycontrol.

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