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Trade Spotlight | What should investors do with KPIT Tech, Garden Reach, India Cements, Jubilant FoodWorks?

Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today

January 10, 2022 / 07:50 AM IST
 
 
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After a day of knee-jerk reaction to Federal Reserve meeting minutes, the market bounced back with moderate gains on January 7. The Nifty50 was back above 17,800, gaining 70 points, backed by banks, IT, FMCG stocks and heavyweight Reliance Industries. The Sensex gained more than 140 points to close above 59,700.

The broader markets also gained, with the Nifty midcap 100 was up 0.5 percent and the smallcap 100 gained 0.4 percent.

Stocks that were in focus on January 7 included India Cements, which was the top gainer in the futures & options (F&O) segment, rising 15.28 percent to Rs 239.85, and Jubilant FoodWorks, the third-largest gainer in the segment, climbing 5.13 percent to Rs 3,763.45.

KPIT Technologies hit a fresh record high of Rs 750 before closing with 12.82 percent gains at Rs 711.25.

Among others, Garden Reach Shipbuilders & Engineers and Redington India also clocked double-digit gains, rising 13.43 percent to Rs 261.75 and climbing 11.85 percent to Rs 163.25.

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Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:

KPIT Technologies

The stock is in a strong up trend across all the time frames, forming a series of higher tops and bottoms. It is well-placed above its short and medium- term important moving averages (20, 50 and 100-day simple moving averages ), which reconfirms the bullish sentiment.

The Bollinger band buy signal on the daily, weekly and monthly charts signifies increased bullish momentum. Rising volumes are observed week-on-week, which signals increased participation in the rally. Investors should buy, hold and accumulate this stock with an expected upside of Rs 770-830, with the downside support zone of Rs 650-600 levels.

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Garden Reach Shipbuilders

The stock took support at its past couple of weeks' low (Rs 203). It has sharply rebounded from its 200-day simple moving average at Rs 203, which signifies a bullish bias.

The stock has also recaptured its 20, 50 and 100-day SMA on a closing basis, which confirms the short-term bullish trend.

With the strong gains of January 7, the stock has also retraced its previous downtrend, indicating the fastest retracement which remains a positive bias.

On the monthly chart, the stock surpassed its two years' multiple resistance zone of Rs 243, signalling a breakout on long-term charts.

The daily, weekly and monthly relative strength index (RSI) are in a bullish mode, which supports rising strength on all time frames.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 290-300, with a downside support of Rs 245-230.

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India Cements

The stock decisively broken out its previous resistance zone of Rs 225 levels on a closing basis after the strong gains made on January 7. This breakout was accompanied by a huge trading volume, indicating rising participation in the rally.

The Bollinger band buy signal on the daily, weekly and monthly chart signifies increased bullish momentum. The daily, weekly and monthly RSI are in a bullish mode that supports rising strength on all time frames.

Investors should buy, hold and accumulate the stock for an expected upside of Rs 280-300, with downside support at Rs 220-210.

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Jubilant FoodWorks

For the past couple of weeks, the stock was holding its 200-day SMA (Rs 3,465), a crucial level to watch out for. On the daily chart, the stock has seen a change of trend to upwards. On the short-term chart, it has formed higher tops and bottoms.

The stock is well placed above its 20 and 200-day SMA, which remains a positive bias. The daily and weekly RSI is sustaining above the 50-mark, which indicates sustained strength. The buying momentum happened along with huge volumes, which indicates buying near the major support zone of Rs 3,500.

Investors should buy, hold and accumulate the stock with an expected upside of Rs 4,000-4,100, with downside support of Rs 3,580-3,500.

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Redington India

With the current close, the stock decisively broke out of its five-months "consolidation range" (Rs 160-137) on a closing basis. The breakout came with huge volumes, representing increased participation on the long side.

The buying momentum was observed from its 20-50-100-day SMA support zone, which coincided at Rs 147. The daily, weekly Bollinger band buy signals suggest a bullish momentum on short to medium-term time frames.

Volume breakouts also support increased participation. The daily, weekly and monthly RSI is in a bullish mode, supporting strength on all time frames.

Investors should buy, hold and accumulate the stock for an expected upside of Rs 180-200, with downside support at Rs 147-145.

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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.



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