Trade Spotlight: What should investors do with PNB Housing, Titan Company & Muthoot Finance?

Indian shares closed higher on June 3, pushing the Nifty50 above 15,700 in intraday trade for the first time. The S&P BSE Sensex rallied nearly 400 points to a fresh record high as well.

Sectorally, the rally was seen in consumer durables, realty, capital goods as well as industrials. The broader markets outperformed as the S&P BSE midcap and the smallcap indexes gained 1.04 percent each.

Stocks that were in focus included PNB Housing Finance, which rallied 10 percent to hit a fresh 52-week high, Titan Company rose over 6 percent and Muthoot Finance closed with gains of nearly 7 percent. All three stocks hit a fresh 52-week high on June 3.

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 on June 4:

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Shrikant Chouhan

Senior VP, Technical Research|Kotak Securities

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PNB Housing: Uptrend likely to continue

The stock has rallied over 100 percent in the quarter. Post the breakout above Rs 435, it is continuously hitting the upper circuit. On June 3, it again opened gap up and registered a 10 percent upper circuit.

On the daily and weekly charts, the stock has formed an uptrend continuation formation which is positive.

However, on the short-term time frame, the stock is in the overbought zone and traders may prefer to reduce long positions if it trades below Rs 720.

The texture of the chart suggests that the uptrend is likely to continue in the medium term but the stock may take a temporary pause near Rs 800 to 845 range.

For the swing traders, Rs 720 should be the key level to watch, below it, the uptrend would be vulnerable.

Titan Company: Breakout pattern

The stock rallied nearly 7 percent on June 3. It opened strong and quickly surpassed the Rs 1,625 resistance mark with strong volume activity.

In the short-term timeframe, the stock has formed a strong price volume breakout pattern. The texture suggests that breakout action will continue in the near future and if the stock succeeds to trade above Rs 1,635.

Muthoot Finance: Breakout likely

The stock has rallied near 20 percent so far in the week. On June 3, Muthoot Finance Ltd made a fresh 52-week high of Rs 1,537.50 and after a strong intraday session, the stock managed to close above the Rs 1,450 resistance mark, which is broadly positive.

The important thing is the price volume activity, the incremental volume activity post-breakout clearly indicates high chances of a further uptrend.

On the daily and weekly charts, the stock has formed a strong promising price volume uptrend continuation formation.

For the trend following traders, Rs 1,450 and 1,420 will be the key levels to watch out for. The overall chart structure suggests if it sustains above the same, then breakout continuation texture is likely to continue to Rs 1,600-1,635.

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