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Last Updated : Aug 12, 2020 08:31 AM IST | Source: Moneycontrol.com

Trade Spotlight: What should investors do with ITC, Axis Bank & Bank of Baroda

Experts are of the view that there are no visible signs which suggest that investors should ho short but a close below 11299 can be considered as an initial sign of weakness.

 
 
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Indian market hit a fresh five-month high on August 11, but experts advise caution at higher levels. The S&P BSE Sensex closed above 38,400 while Nifty50 also climbed 11,300 levels.

Sectorally, the action was seen in metals, banks, finance, and oil & gas space, while profit-taking was visible in telecom, healthcare, and consumer durables.

Experts are of the view that there are no visible signs which suggest that investors should go short but a close below 11,299 can be considered as an initial sign of weakness.

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ITC has rallied for the fourth consecutive day in a row and has also witnessed a rise in volumes. The stock has rallied more than 4 percent so far in August. Axis Bank rose on raising Rs 10,000 crore via QIP.

Bank of Baroda share price declined 3 percent in early trade on August 11, a day after the lender reported its June quarter numbers. The bank posted a net loss of Rs 864.3 crore for the June quarter 2020 due to provisioning on standard accounts.

We have collated views of an expert on what investors should do when the market resumes trading on 12 August:

Expert: Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in

ITC: Fresh buying can be considered on dips with a stop below Rs 190

This counter appears to be in a sideways consolidation phase in a larger range of Rs 210–191 levels and Tuesday’s move also appears to be on the back of decent base which it has built around 191 levels.

However, it appears to be faltering from around the upper end of the said consolidation zone of Rs 210 levels.

Interestingly, this counter is also facing resistance at 189-Day exponential moving average as the scrip encountered selling pressure after testing the said average on multiple occasions in the past including in last Tuesday’s session.

Hence, to strengthen its momentum on the upside it needs a strong close above Rs 210 levels. In that scenario, a decent target of 239 can be expected.

Positional Traders can continue to retain a positive outlook on this counter as long as it sustains above Rs 191 levels. Fresh buying can be considered either on dips with a stop below Rs 190 on a closing basis.

Axis Bank: Traders can look for a target of Rs 470

There seems to be a short-term trading opportunity in this counter as it appears to have registered a breakout on lower time frame charts from an extremely narrow range of 10 points between Rs 437–427 in which it was moving in the preceding three trading sessions before registering the said breakout.

Hence, as long as it sustains above Rs 435 levels a modest target of Rs 470 can be expected but to embark on a medium-term sustainable upmove it needs a close above Rs 485.

For time being traders can remain positive and look for a target of Rs 470 with a stop below Rs 430 on a closing basis.

Bank of Baroda: Fresh buying should be avoided

After retracing 50 percent of its last leg of the rally from the lows of Rs 36–55 levels it appears to be consolidating around Rs 45 levels. However, it is critical for this counter to sustain above the said level as this scrip has been looking weak in the last two trading sessions.

Hence, fresh buying should be avoided but can be considered on a close above Rs 49 for an initial target of Rs 54 whereas traders who are already long shall maintain a tight stop below Rs 45 on a closing basis.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Aug 12, 2020 08:31 am
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