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Trade Spotlight: What should investors do with Tata Steel, Hindalco and Balrampur Chini?

Stocks that were in focus include Tata Steel, which rose nearly 7 percent to hit a 52-week high, Hindalco Industries (gained over 10 percent), and Balrampur Chini (gains of nearly 8 percent). All 3 stocks hit a fresh 52-week high on Thursday

July 30, 2021 / 08:37 AM IST
 
 
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Indian market snapped 3-days losing streak on Thursday following positive trend in other Asian markets. The index rose over 200 points while the Nifty50 closed above 15,750 levels.

Sectorally, buying was seen in metals, realty, public sector, and IT stocks while selling pressure was visible in FMCG, telecom, power, and oil & gas stocks.

On the broader markets front, the S&P BSE Mid-cap index rose 0.39 percent, and the S&P BSE Small-cap index gained 0.9 percent.

Stocks that were in focus include Tata Steel, which rose nearly 7 percent to hit a 52-week high, Hindalco Industries (gained over 10 percent), and Balrampur Chini (gains of nearly 8 percent). All 3 stocks hit a fresh 52-week high on Thursday.

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 today:

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Tata Steel: Ride The Trend

The stock has rallied over 7 percent on July 29th in the July F&O series, Tata Steel Ltd gained over 30 percent. On Thursday, the stock opened with a gap up and quickly surpassed Rs. 1380 resistance mark with strong volume activity.

Post intraday breakout, it was trading above resistance level throughout the day which is broadly positive for the stock. On the daily and weekly time frame, the stock has formed a strong price volume breakout continuation pattern.

The texture of the pattern suggests that the breakout action will continue in the near future, if the stock succeeds to trade above Rs. 1380 level.

For the swing traders, Rs.1380 should be the sacrosanct level, and if the stock trades above the same then we can expect the uptrend to continue up to Rs.1501-1550.

Hindalco: Temporary overbought

On July 29th, the stock has registered an all-time high of Rs. 474. In this month, the stock has rallied nearly 25 percent.  On Thursday, after a strong opening, the stock rallied from Rs. 420 to 474.

On the daily and weekly charts, the stock has formed a breakout continuation pattern which is grossly positive for Hindalco Ltd.

However, intraday chart texture indicates a temporary overbought situation and traders may take a cautious stance near Rs. 474 level.

As long as the stock is trading above Rs. 435, uptrend formation is likely to continue up to Rs. 474-495. On the flip side, dismissal of Rs. 435 could possibly trigger a quick short-term correction up to Rs. 420-400.

Balrampur Chini: Stay invested

On the daily and weekly charts, the stock has formed a strong bullish Higher High and Higher Low series. The incremental volume activity near the breakout level indicates high chances of a fresh uptrend from current levels.

Currently, the stock is trading well above the short-term as well medium-term averages which advocates an uptrend wave likely to continue in the near term.

For the positional traders, Rs. 360 would be the key level to watch out. If the stock trades above the said level the momentum could take the stock towards Rs. 400-410.
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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