Trade Spotlight | What should you do with Rain Industries, Coal India, SBI Card, Abbott India?

Bulls firmed up their hold on Dalal Street on February 9, especially ahead of the RBI monetary policy decision scheduled today. The Nifty50 rallied nearly 200 points (and recovered more than 400 points from the previous day's low) to close above 17,460 levels, and the BSE Sensex climbed over 650 points to settle at 58,466, backed by all sectors barring PSU Bank.

The broader markets were also supported by bulls, with the Nifty Midcap 100 and Smallcap 100 indices rising 1.14 percent and 0.41 percent respectively.

Stocks that were in focus included Abbott India, Rain Industries, SBI Card and Coal India which were top four gainers in the futures & options segment on Wednesday.

Abbott India climbed 7.13 percent to close at Rs 16,672.40, followed by Rain Industries that gained 5.48 percent at Rs 238.60, SBI Card that rose 5.41 percent to Rs 863.70 and Coal India that jumped 5.41 percent to Rs 168.60.

Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:

Rain Industries

Rain Industries has corrected approximately 18 percent from its previous high of Rs 255.8 in the last couple of weeks and has bounced back from its 200 days exponential moving average (DEMA). Even in the last trading session on daily chart it gave nice triangle breakout with huge volume and turned positively to have an early sign of reversal.

On the daily indicator front, 14 period RSI (relative strength index) has bounced back from 50 levels along with MACD (moving average convergence divergence) making positive crossover exactly on zero line which is a sign of great strength.

So from investor perspective one should add at current levels with upside potential of Rs 280-290 and credible support is seen at Rs 215-218.

Abbott India

Abbott India has corrected 35 percent in last 4 months and is currently placed well below its 200 DEMA on daily chart. At current juncture stock has tested 0.786 percent retracement of previous swing high.

On daily 14 period RSI is displaying impulsive behaviour at oversold levels with massive volume indicating that the stock has formed it base and ready for up move. So from investor perspective, one should add at current levels with upside potential of Rs 19,500-20,000 and credible support is seen at Rs 15,300.

Coal India

Coal India has corrected approximately 27 percent from its previous high of Rs 203.8 in last 5 months and has bounced back from its 200 DEMA. Even in the last trading session on daily chart it gave nice triangle breakout with huge volume and turned positively to have an early sign of reversal.

On daily indicator front 14 period RSI has bounced back from 50 levels along with weekly MACD making positive crossover exactly on zero line which is a sign of great strength.

So from investor perspective one should add at current levels with upside potential of Rs 190-193 and credible support is seen at Rs 150.

SBI Cards and Payment Services

SBI Card has corrected approximately 33 percent from its previous high of Rs 1,165 in last 6 months and is currently placed well below its 200 DEMA on daily chart. Currently on daily chart it has recently tested potential reversal zone of bullish CRAB pattern along with 14 period daily RSI displaying impulsive behaviour at oversold levels with good positive volume.

Also MACD is showing positive divergence which indicates that the stock has formed it base and ready for up move. So from investor perspective one should add at current levels with upside potential of Rs 1,000-1,050 and credible support is seen at Rs 800.