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Trade Spotlight | What should you do with Muthoot Finance, Aster DM Healthcare, Federal Bank on Wednesday?

Muthoot Finance was the fourth biggest gainer in the futures & options segment, rising nearly 6 percent to Rs 1,012 and formed Bullish Engulfing kind of pattern on the daily charts after taking support at around Rs 950 levels.

September 28, 2022 / 06:35 AM IST
 
 
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The market failed to sustain the recovery due to volatility and selling pressure at higher levels given the subdued global environment, on September 27. The benchmark indices ended flat with a negative bias as the BSE Sensex declined just 38 points to 57,107, and the Nifty50 fell 9 points to 17,007, formed bearish candle on the daily charts.

The broader markets have managed to eke out gains with the Nifty Midcap 100 and Smallcap 100 indices rising 0.16 percent and 0.25 percent respectively.

The volatility index remained elevated, making the bulls uncomfortable at Dalal Street. India VIX, which measures the expected volatility in the market, fell 1.48 percent to 21.57 levels.

Stocks that performed better than broader markets included Muthoot Finance which was the fourth biggest gainer in the futures & options segment, rising nearly 6 percent to Rs 1,012 and formed Bullish Engulfing kind of pattern on the daily charts after taking support at around Rs 950 levels.

Aster DM Healthcare shares jumped 8.7 percent to Rs 250.65 and formed large bullish candle on the daily charts, managing to recover most of losses seen in previous three trading sessions, while Federal Bank climbed 3 percent to Rs 114.4 and saw bullish candlestick formation on the daily charts, after taking support at around Rs 109 levels.

Here's what Ruchit Jain of 5paisa.com recommends investors should do with these stocks when the market resumes trading today:

Federal Bank

The stock has recently seen a decent upmove and has shown a relative outperformance to its peers. However, along with the correction in the banking stocks in the last few sessions, this stock too has corrected and prices have breached its ‘20 DEMA’ (days exponential moving average) support.

The RSI (relative strength index) readings on the daily chart also have given a negative crossover from the overbought zone indicating lack of momentum.

Hence, although the broader trend is positive, some consolidation or correction in the near term cannot be ruled out. The resistance for the stock will now be seen around Rs 118-122 while the important support for the stock is placed around Rs 105.

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Muthoot Finance

The stock has corrected sharply since the month of November 2021 wherein the intermediate pullbacks have witnessed selling pressure. In Monday's session, the stock closed below its previous swing low support but prices reversed sharply on Tuesday and showed a decent outperformance with gains of almost 6 percent.

This one day’s upmove does not change the overall trend but due to the oversold set-ups, Tuesday's move indicates a pullback move which could continue in the near term.

The resistance during any pullback move will be seen around Rs 1,065 followed by Rs 1,100 while Rs 950-960 will be seen as an immediate support range.

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Aster DM Healthcare

The stock gave a breakout from a consolidation phase in mid-July and since then, the prices have been forming a ‘Higher Top Higher Bottom’ structure indicating an uptrend.

The volumes during price upmoves have been decent while the volumes are low on corrective moves. This indicates that the trend continues to be positive and hence traders can look to trade with a positive bias.

The support for the stock is placed in the range of Rs 235-225 while the resistance will be seen around Rs 265 followed by Rs 276.

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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