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Trade Spotlight | What should investors do with Tata Chemicals, Can Fin Homes, Godrej Agrovet on Wednesday?

Malay Thakkar of GEPL Capital advises traders and investors to also continue holding NLC India for an upside towards Rs 97 followed by Rs 102

May 04, 2022 / 06:28 AM IST
 
 
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The equity benchmarks recovered smartly from the day's low in late trade to end flat on May 2, as IT, auto and select banking & financials weighed on sentiment, while HDFC twins and ITC supported the market.

The Sensex closed 85 points down at 56,976, while the Nifty ended 33 points lower at 17,069. The correction was, however, steeper in broader space. The Nifty Midcap 100 index declined 0.6 percent and the smallcap 100 index fell 1.3 percent.

Volatility remained elevated, causing discomfort to the bulls. The India VIX, which measures the expected volatility in the market, rose 4.46 percent to 20.28 levels.

Stocks that were in action included Tata Chemicals and Can Fin Homes, which were the biggest gainers in the futures & options segment on the second day of the May series.

Tata Chemicals rallied nearly 10 percent to Rs 1,033 and Can Fin Homes gained 8.5 percent to Rs 642.4.

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Amber Enterprises India ended at a record closing high at Rs 3,915.50, up 5.55 percent. NLC India rose nearly 9 percent to Rs 88.95, the highest closing since June 2018 and Godrej Agrovet climbed 5 percent to Rs 572.20.

The market was shut on May 3 on account of Eid.

Here's what Malay Thakkar of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:

Tata Chemicals

On longer term charts, Tata Chemicals is moving in a strong uptrend since March 2020. On May 2, the stock gave a strong breakout backed by good volume activity. It also went past its 20-day simple moving average (SMA--Rs 980) and closed at a three-month high.

On the daily chart, the stock formed a breakaway gap, which indicates strength in the breakout.

The relative strength index (RSI) indicator has broken above the 60-mark, signalling a strong momentum.

We advise traders and investors to buy, hold and accumulate this stock and expect an upside towards Rs 1,140-1,160. The downside support for the stock is placed at Rs 980.

Image5252022

Can Fin Homes

Can Fin Homes has been moving sideways for the past nine months in a symmetrical triangle formation. On May 2, the stock showed good price volume action and recaptured its 20-week SMA (Rs 605) with a gap up.

The weekly RSI indicator is holding above the 50-mark, which is a positive sign.

The stock has the potential to move higher towards Rs 675, a break above which will increase the momentum and can take the stock to Rs 720. On the downside, Rs 605-610 will act as important support.

Image6252022

Amber Enterprises

Amber Enterprises has been moving in a rational uptrend since March 2020 and is maintaining higher highs and higher lows formation.

This week, the stock broke out of a nine months of consolidation, with a sharp increase in volumes, indicating strength with the breakout.

The RSI indicator has crossed the 60-mark and now trades at the highest level since October 2021. Traders and investors can continue holding the stock and expect an upside towards Rs 4,200 followed by Rs 4,450; Rs 3,750-3,780 will act as downside support.

Image7252022

NLC India

NLC India is moving higher after retesting the breakout level at Rs 80. On the daily charts, it formed a strong bullish Marubozu candle and closed at the highest level since July 2018.

In the last week, the up move in the prices has been backed with heavy volumes, indicating buying interest and participation in the counter.

We advise traders and investors to continue holding the stock for an upside towards Rs 97 followed by Rs 102. A strict stop-loss of Rs 82 on a daily closing basis should be maintained.

Image8252022

Godrej Agrovet

In the recent correction from the highs of Rs 746, Godrej Agrovet took support at its 61.8 percent Fibonacci retracement level of Rs 450.

In the last week, the stock gave a breakout, backed by the highest volumes in the past 10 months and closed at a five-month high.

The RSI indicator has broken above 70, suggesting bullish momentum in the counter.

We expect the stock to move towards Rs 635 followed by Rs 665. We recommend a stop-loss of Rs 525 on a daily closing basis.

Image9252022

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.
Sunil Shankar Matkar
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