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Trade Spotlight: What should investors do with Panacea Biotech, Route Mobile & Finolex Cables?

Here's what Mazhar Mohammad of Chartviewindia.in recommends investors should do with these stocks when the market resumes trading today:

May 26, 2021 / 07:50 AM IST
 
 
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Indian market closed mixed on Tuesday after a strong opening. Investors preferred to book profits at a higher level, but the long-term trend looks intact.

Sectorally, buying was seen in consumer durable, consumer discretionary, and IT stocks while profit-taking was seen in power, energy, banks, and capital goods.

Stocks that were in focus include Panacea Biotech which rallied 5 percent, Route Mobile (up over 11 percent), and Finolex Cables (up over 12 percent). All the stocks hit a fresh 52-week high on Tuesday.

Here's what Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, recommends investors should do with these stocks when the market resumes trading today:

Close

Panacea Biotech: Buy

This counter witnessed a parabolic rise as it rallied from the lows of Rs 180 to Rs 409 in just 16 sessions. However, that rally was followed by a corrective and consolidation phase of the last 18 sessions.

Currently, as this counter is trading close to the higher end of the trading range placed around Rs 406 levels, it needs a fresh breakout above the said resistance of Rs 406.

If so, it can head to test its lifetime highs present around Rs 490 registered way back in the year 2006.

As the risk-to-reward ratio looks lucrative, positional traders can go for fresh long positions with a stop below Rs 390 on a closing basis and look for a target of Rs 490.

Route Mobile: Buy

This counter seems to have resumed its up move after a corrective and consolidation phase of 62 sessions. Interestingly, the strong price action is backed by massive volumes hinting that the bottom may be in place at a recent low of Rs 1497.

Hence, with this kind of price action, this counter might have embarked on a fresh leg of uptrend. In that scenario, the initial target shall be the test of interim top present around Rs 1768 levels, which also coincides with the 62% retracement level of its fall from Rs 1979 to 1395 levels.

Therefore, traders are advised to adopt a two-pronged strategy of buying now and adding on dips into the zone of Rs 1620 – 1590 levels and look for a target of Rs 1768.

If this counter manages a strong close above Rs 1768, a bigger target of Rs 1875 can’t be ruled out. A stop suggested for the trade is below Rs 1,520

Finolex Cables: Buy

This counter seems to have registered a price and volume breakout from its multi-week consolidation zone of Rs 426 – 346 levels. This range breakout target itself is placed around Rs 506 levels.

Interestingly, this target also coincides with the top of Rs 507 registered in March 2019.

However, considering the strong price appreciation which is accompanied by a breakout of the last trading session, positional traders are advised to adopt a two-pronged strategy of buying now and adding on dips into the zone of Rs 433 – 424 and look for a target of Rs 497. A stop suggested for the trade is below Rs 399.

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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