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Trade Spotlight | What should you do with Astral, Redington (India), KEI Industries on Friday?

Redington (India) saw strong buying interest and had a gap-up opening on Thursday. It climbed 9.1 percent to Rs 139.55, and formed a large bullish candlestick pattern on daily charts with significantly higher volumes.

August 05, 2022 / 08:11 AM IST
 
 
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The market ended a highly volatile session on a negative note on August 4, snapping a six-day winning streak ahead of the outcome of a three-day monetary policy committee meeting on Friday.

The BSE Sensex fell 52 points to 58,299, while the Nifty50 recovered more than 200 points loss and closed just 6 points lower at 17,382 and formed bearish candle on the daily charts yesterday.

In the broader space, there was a mixed trend amid weak breadth. The Nifty Smallcap 100 index gained four-tenth of a percent. About 1,047 shares declined against 901 advancing shares on the NSE.

India VIX, after a small break on Wednesday, jumped 4.37 percent to 19.26 levels on Thursday, the weekly expiry day. In the last four day, the index has increased 16.35 percent amid geopolitical tensions between Taiwan and China, and ahead of interest rate decision by the central bank.

Stocks that were in action and outperformed the broader space included Astral which had a strong gap-up opening and gained 4.2 percent to close at Rs 1,963.2, the highest closing since May 5 and formed a large bullish candle on daily charts with higher volumes.

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Redington (India) was the second stock that also saw a strong buying interest and had a gap up opening. It climbed 9.1 percent to Rs 139.55, and formed a large bullish candlestick pattern on the daily charts with significantly higher volumes.

KEI Industries also had a gap up opening and rallied 7 percent to end at record closing high of Rs 1,389.25. The stock has seen a robust bullish candle formation on the daily charts with very large volumes.

Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:

Astral

After a short term correction, the stock took support near Rs 1,580 and reversed. After reversal, in this month so far, it rallied nearly 10 percent. It also formed a long bullish candle on daily and weekly charts which is largely positive.

Technically, promising positive momentum is indicating further upside from the current levels. For the trend-following traders, Rs 1,900 would act as a trend decider level, above which it could move up to 200 day SMA (simple moving average) Rs 2,020-2,050. On the flip side, below Rs 1,900, traders may prefer to exit from trading long positions.

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Redington (India)

On Thursday, the stock rallied nearly 9 percent. It opened with gap up and quickly surpassed short term resistance of Rs 135 with strong volume activity. Despite weak market conditions, Redington (India) maintained its strong momentum throughout the day.

In the short term time frame, the stock has formed a strong price volume breakout pattern. The texture of the pattern suggests breakout action will continue in the near term if the stock succeeds to trade above Rs 134 level.

For breakout traders, Rs 134 would be the sacrosanct level, and trading above the same we can expect uptrend continuation wave up to Rs 150-155.

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KEI Industries

In this quarter so far, the stock has rallied over 20 percent. On Thursday, the stock made a fresh all-time high of Rs 1,400. On daily and intraday charts, the stock is holding higher bottom series pattern indicating continuation of uptrend in the near future.

For the trend-following traders, Rs 1,300 could be the key level to watch and if the stock manages to trade above the same then we could expect an uptrend continuation wave up to Rs 1,500-1,570.

On the flip side, below Rs 1,300, traders may prefer to exit from trading long positions.

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Disclaimer: The views and investment tips expressed by investment 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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