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Trade Spotlight | What should you do with Canara Bank, GMDC, Shriram Transport?

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

January 28, 2022 / 07:05 AM IST
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After a day of rebound, the market was caught in a bear trap once again with the benchmark indices correcting a percent, weighed down by FMCG, IT, pharma and metal stocks on Thursday, the expiry day for January futures and options contracts. Hawkish US Federal Reserve commentary, rising oil prices and consistent FIIs selling had dented the market sentiment.

The BSE Sensex fell nearly 600 points to 57,277, and the Nifty50 declined nearly 170 points to 17,110, while the Nifty Midcap 100 and Smallcap 100 indices were down 1.05 percent and 0.73 percent.

Stocks that were in focus include Canara Bank and Shriram Transport Finance Company which were the biggest gainers in the futures and options contracts, rising 8.76 percent to Rs 240.80 and climbing 6.38 percent to Rs 1,241.10, while Gujarat Mineral Development Corporation was locked in the 10 percent upper circuit at Rs 110.70.

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

Canara Bank

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After a strong uptrend rally from Rs 190 to Rs 225, the stock is hovering at  Rs 210 to Rs 232. However, the medium-term texture of Canara Bank is robust.

In addition, on the daily charts, the stock had a higher bottom formation which also supported short-term uptrend. Unless it is trading below Rs 225, positional traders retain an optimistic stance and look for a target Rs 250-260.

Fresh buying can be considered now and on dips, if any, between Rs 240 and Rs 235 levels with a stop-loss below Rs 225.

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Gujarat Mineral Development Corporation

In this month so far, the stock rallied over 50 percent. After a strong uptrend rally from Rs 75 to Rs 115, the stock has been hovering within the range of Rs 95 to Rs 115. On Thursday, despite weak market conditions, the stock rallied 10 percent.

On the daily charts, the stock has formed a strong bullish candle which is broadly positive. It has consistently been taking support near Rs 100 level and the texture of the chart suggests that the uptrend formation is likely to continue in the near term if the stock succeeds to trade above Rs 100-105 levels.

For the positional traders, Rs 105 would be the key level to watch. If the stock manages to trade above the same, then we can expect uptrend continuation wave up to Rs 120-130.

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Shriram Transport Finance Corporation

After a medium-term price correction, the stock finally took the support near Rs 1,150 and reversed sharply. After reversal, the stock is hovering in the range of Rs 1,150-1,250.

The stock sees non-directional activity, while traders are waiting for the either side breakout.

For the bulls, Rs 1,260 would be the important breakout level to watch out for. And if, the stock manages to close above this, we can expect a quick uptrend rally towards Rs 1,300-1,350. On the flip side, trading below Rs 1,150 it may increase further weakness up to Rs 1,100-1,050.

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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.



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