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Trade Spotlight | What should you do with Future Retail, Cipla, Bajaj Finance, and SBI now?

Here's what Karan Pai of GEPL Capital, recommends investors should do with these stocks when the market resumes trading today.

December 21, 2021 / 07:24 AM IST
 
 
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The market managed to curtail some losses in the last couple of hours of trade but still closed with a 2 percent cut on December 20, as Omicron worries weighed on investor sentiment. The benchmark indices corrected more than 3 percent intraday.

The BSE Sensex plunged nearly 1,200 points to 55,822, while the Nifty50 fell 371 points to close at 16,614, the lowest level closing since August 23. All sectoral indices saw weak closing, while the Nifty Midcap 100 and Smallcap 100 indices lost 3.68 percent and 4 percent respectively.

Stocks that were in focus include Future Retail, which was locked in the 20 percent upper circuit at Rs 57.50. In fact, all Future Group stocks closed with 19.6-20 percent gains, despite steep correction in markets.

Cipla was the biggest gainer in the futures and options segment, rising 3.91 percent to close at Rs 893.80. Other stocks that were in action include State Bank of India and Bajaj Finance which were among the top 10 losers in the Nifty50, falling 3.98 percent to Rs 449.20 and 3.87 percent to Rs 6,634.15.

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

Close

Future Retail

Future Retail has been moving range-bound since September 2020 and hovering around the 20-week SMA (simple moving average).

On the shorter time frame, we can see that the prices witnessed a runaway gap on December 20. This up move was backed by good volume build-up, indicating participation in the up move.

The RSI (relative strength index) plotted on the daily time frame can be seen forming a bullish hinge near the overbought level, indicating a bullish momentum.

Going ahead, we expect the prices to move higher towards the Rs 64 mark. If the prices breach the Rs 64 mark, we might see the prices move higher towards Rs 76. Investors holding this stock can use this pullback towards Rs 76 to exit their long positions.

Image1620122021

Cipla

Cipla, on the longer time frame, can be seen moving in a range since June. On December 20, the prices formed a strong bullish candle after bouncing off the support level of Rs 850. This up move was backed by a good volume build-up, indicating participation in the up move.

Going ahead, we believe the stock can move higher towards the Rs 943 mark immediately. If the prices manage to sustain above this level, we might see an up move towards Rs 1,000.

Investors can continue to hold on to their positions with a strict stop loss of Rs 850 on daily closing basis.

Image1720122021

Bajaj Finance

Bajaj Finance has been forming a lower low lower high pattern since October. On December 20, the prices moved below the previous swing low of Rs 6,678. This move was backed by good volume build-up, indictaing participation in the down move.

The RSI plotted on the weekly time frame can be seen moving below the 50 mark, indicating increasing bearish momentum in the prices.

Going ahead, the multiple touch point level of the Rs 6,200 is going act as a support level. Investors holding this stock can exit the position as the price action suggests a move towards Rs 6,200 immediately followed by Rs 6,000.

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SBI

SBI on the higher time frame can be seen moving lower ever since the prices tested the high of Rs 542 in November.

On the weekly time frame, we can see that the prices moved below the 20-week SMA for the first time since July.

The RSI plotted in the weekly time frame can be seen placed at the 50 mark and moving lower as the prices breach below the 20-week SMA, indicating increasing bearish momentum in the prices.

Going ahead, immediate support is placed at Rs 430. If it breaks below this, we might see the prices move lower towards Rs 400.

We would advise the investors to hold on to the position with a stop-loss of Rs 430. If the prices breach below this level we might see the prices move lower towards Rs 400.

Image1920122021

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that 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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