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Trade Spotlight | What should you do with ITC, IndusInd Bank, United Spirits stocks?

Here's what Shrikant Chouhan of Kotak Securities advises investors holding these stocks on trading today.

October 29, 2021 / 08:37 AM IST
 
 
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Bears took full control over Dalal Street on October 28 with all sectoral indices caught in their trap, driving the benchmarks down nearly 2 percent. It was the biggest single-day fall since April 2021, as global brokerage house Morgan Stanley downgraded Indian equities to equal-weight from overweight due to expensive valuations.

The BSE Sensex fell below the psychological 60,000 mark, down 1,158.63 points, to close at 59,984.70. The Nifty50 also closed well below the crucial 18,000 milestone, falling 353.70 points, to close at 17,857.30.

Bank Nifty, metal and realty were prominent losers with more than 3 percent correction. Pharma and FMCG indices corrected around 2 percent each.

Stocks that were in focus included United Spirits, which was one of the outperformers in the broader space, hitting a record high of Rs 944.75 before closing with 1 percent gain at Rs 892.55. IndusInd Bank was the biggest gainer in the BSE Sensex as it touched a fresh 52-week high of Rs 1,242 before closing with 2.93 percent gains at Rs 1,176 after September quarter earnings.

ITC seems to have reacted negatively to its September quarter earnings, falling 5.6 percent to close at Rs 225.10. It was the biggest loser in the BSE Sensex.

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

ITC

The stock witnessed a sharp price correction from Rs 265 resistance level. On the daily and intraday time frames, it has formed lower high and lower low formation which is broadly negative for the ITC.

However, the medium-term structure is still on the positive side. Over 15 percent price correction from the monthly highest level, currently the stock is trading near 50-day SMA (simple moving average).

We are of the view that, 50-day SMA and Rs 219 would act as a key support level for the positional traders. A sharp pullback rally up to Rs 240-245 is not ruled out if it succeeds to trade above Rs 219.

IndusInd Bank

On Thursday, the stock opened with a gap and made a fresh 52-week high of Rs 1,242. But one more time it took the resistance near Rs 1,240 and corrected sharply.

The stock sees non-directional activity now. Traders are waiting for the either side breakout. For the bulls, Rs 1,220-1,240 would be the important breakout level to watch.

And if, the stock manages to close above the same, we can expect quick uptrend rally towards Rs 1,270-1,300. On the flip side, trading below Rs 1,140 may increase further weakness up to Rs 1,100-1,070.

United Spirits

In this week so far, the stock rallied over 8 percent. After a yesterday sharp reversal move, on Thursday, the stock opened with a gap up and registered a fresh all-time high of Rs 944.75.

On the weekly charts, the stock has formed strong bar reversal bullish candle along with strong modest volume. Further, on daily charts, it has formed higher bottom series pattern which also support further uptrend from current levels.

For the positional traders, Rs 850-830 would be the key level to watch. If it manages to trade above the same then we can expect uptrend continuation wave up to Rs 1,000.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

 



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