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Trade Spotlight: What should investors do with Jai Corp, MindTree & Sonata Software?

Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:

May 28, 2021 / 07:53 AM IST
 
 
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Indian market closed higher on the F&O expiry day on Thursday led by a strong rally seen in banks as well as consumption stocks. Nifty50 closed at a fresh record closing higher, and rollover data suggests that the index is on track to hit fresh highs in the June series.

The Nifty May series settled with the gains of nearly 3 percent as it closed at 15337 compared to the April close of 14894 levels. It continued the formation of higher high - higher lows in all four weeks of the series.

“Higher rollover compared to last 3-month average, rising Put Call Ratio and Falling volatility indicates that bulls are likely to hold command to take the indices to new lifetime high zones,” Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited said.

Sectorally, financials lifted the market with NiftyBank gaining more than 1%, followed by consumer durables, power, utilities, and IT.

On the broader markets front – the S&P BSE Midcap index rose 0.54 percent, and the S&P BSE Smallcap index closed with gains of 0.34 percent.

Close

Stocks that were in focus include Jai Corp which rallied 10 percent hit a fresh 52-week high, MindTree (4 percent) and Sonata Software (7 percent). All three stocks hit a fresh 52-week high on Thursday.

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

Jai Corp: Buy

The stock rallied over 10 percent on May 27. On Thursday, the stock opened on a strong note and quickly surpassed Rs 108 resistance mark with strong volume activity.

Despite tepid market conditions, Jai Corp Ltd 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 future if the stock succeeds to trade above Rs 105 level.

For the swing traders, Rs 105 should be the sacrosanct level, and if it trades above the same, then we can expect the uptrend to continue up to Rs 125-135 levels.

Sonata Software: Hold

In May, the stock has rallied over 21 percent, and the important point is that the incremental volume activity post the breakout indicates a continuation of the uptrend wave.

On the daily as well as weekly charts, the stock has formed a breakout continuation formation which is grossly positive for Sonata Software Ltd.

However, on intraday charts, the stock is in an overbought zone and there are high chances of a quick short-term price correction if it starts trading below Rs 665.

For the next few trading session, Rs 665 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 Rs 750.

Further uptrend may also continue that could lift the stock up to Rs 790.  On the flip side, traders may prefer to exit out from trading long positions at a close below Rs 665.

MindTree: Book Profits

On May 27, the stock opened on a strong note and very quickly made a fresh all-time high of Rs 2342.65. On the weekly charts, it has formed a Higher Bottom series formation which is broadly positive but on the daily chart, the stock is consistently facing resistance near Rs 2300 mark.

We are of the view that traders may prefer to book profits if the stock succeeds to close below Rs 2245.  On the flip side, above Rs 2245, the short-term uptrend is likely continue up to Rs 2450-2375.

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.



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Kshitij Anand is the Editor Markets at Moneycontrol.
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