Trade Spotlight: What should investors do with SBI Life, BHEL & BPCL?

Here's what Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in, recommends investors should do with these stocks when the market resumes trading on March 10:

March 10, 2021 / 07:44 AM IST
 
 
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Indian market closed with gains of about 1 percent on March 9 tracking positive global cues. The S&P BSE Sensex rose by nearly 600 points while the Nifty50 closed a shade below 15,100 levels.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 584 points to 51,025, while the Nifty50 closed with gains of 142 points at 15,098 on Tuesday.

Sectorally, the action was seen in banks, finance, IT, consumer durables, and FMCG, and profit-taking was seen in metals, oil & gas, and public sectors.

Stocks that were in focus included SBI Life Insurance Company, which rose by about 5 percent, BHEL, which hit a fresh 52-week high and closed with gains of little over a percent, and BPCL, which was down by nearly 5 percent.

Here's what Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in, recommends investors should do with these stocks when the market resumes trading on March 10:

Close
SBI Life Insurance: Book profits

Even though the stock registered a breakout from its multi-week trading range of Rs 954–838 levels, there seems to be little upside as the lifetime high registered by the counter (November 2019) sits at Rs 1030.

Hence, taking the lifetime high as a critical resistance level, we advise traders to book profits.

In the near term, the counter needs to sustain above Rs 954 levels as failure to do so on a closing basis can attract some selling pressure in the form of profit-booking.

Nevertheless, a correction towards Rs 950 can be a good investment opportunity for medium-term investors with a multi-month trading horizon.

BPCL: Exit

Technically, this counter has failed to negotiate critical resistance placed around Rs 482 levels on the weekly charts as evident from the correction seen on March 5.

Moreover, this downswing is looking like a follow-through to the Shooting Star formed on weekly charts last week by confirming some sort of double top formation around Rs 482 levels.

Hence, if the slide continues, it should ideally go down towards Rs 400 levels unless it stabilises around Rs 435 for the next couple of sessions. Therefore, the best thing for traders is to press the exit button.

BHEL: Hold

This erstwhile bluechip counter, which was completely down and out of the radar since the year 2007, now seems to be a mere catch-up play as Public Sector enterprises are currently under the limelight.

Technically, it needs to sustain above Rs 57 levels on a closing basis in order to extend its upswing towards Rs 62 levels where critical resistance appears to be in place on the long-term charts.

Meanwhile, a close below Rs 53 can extend the weakness towards Rs 49 and can force the counter into a sideways consolidation.

As upsides seem to be limited, traders are advised to either book profits at the current level or consider holding by placing a stop below Rs 53 on a closing basis.

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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