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Trade Spotlight | What should you do with RCF, KPIT Technologies, Rallis India on Thursday?

KPIT Technologies shares rallied more than 6 percent to Rs 727 and formed long bullish candle on the daily charts with above average volumes. There was a breakout of long downward sloping resistance trend line adjoining January 10 and November 17 this year.

November 24, 2022 / 06:46 AM IST
 
 
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The market on November 23 managed to close with moderate gains after volatility and rangebound trade ahead of expiry of November futures & options contracts. Traders also looked cautious ahead of FOMC minutes scheduled to be released tonight.

The BSE Sensex gained more than 90 points to close above 61,500 mark, while the Nifty50 rose 23 points to 18,267 and formed bearish candle on the daily charts.

The broader markets also traded in line with benchmarks as the Nifty Midcap 100 index climbed third of a percent and Smallcap 100 index rose half a percent.

India VIX, the fear index went up by 1.44 percent to 14.04 level, but overall remained at lower levels, giving comfort to bulls.

Stocks that performed better than broader markets included Rashtriya Chemicals and Fertilisers which jumped 11.5 percent to Rs 116.3 and formed robust bullish candle on the daily charts with large volumes. It has seen a breakout of downward sloping resistance trend line adjoining April 19 and September 16.

KPIT Technologies shares rallied more than 6 percent to Rs 727 and formed long bullish candle on the daily charts with above average volumes. There was a breakout of long downward sloping resistance trend line adjoining January 10 and November 17 this year.

Rallis India was also in action, climbing more than 4 percent to Rs 239 and formed healthy bullish candlestick pattern on the daily charts with strong volumes. It has seen a breakout of downward sloping resistance trend line adjoining September 15 and November 21 this year.

Here's what Anand James of Geojit Financial Services recommends investors should do with these stocks when the market resumes trading today:

KPIT Technologies

Though the vertical rise of Wednesday marks a breakaway move from the last fortnight's consolidation, the proximity of the year's peak of Rs 741 rings caution. However, we are inclined to be believed that the stock is fast closing in on the completion of a Cup and Handle pattern formation for almost two years, setting up a major upside breakout.

We would like to play this with a modest target of Rs 770 for the next three months initially and re assess later. Entry into this may be attempted on dips towards Rs 710 region placing a stop-loss below Rs 678.

Rallis India

We are now near the upper extremity of a four-month long parallel trading range, and this is the third time that this barrier is being attempted for a breach.

It is said that “third is the charm” and we have reasons to believe that the present move has the making of a breakout move past the Rs 240 barrier.

Besides strong volumes and a price breakout, the present move is replete with continuation patterns that encourages us to aim for 290. All longs may be protected with a stop-loss placed below Rs 230 levels, with a two-to-three-month view.

RCF

After seven months of frustrating rangebound trades, RCF has made a strong break out, testing a new peak for the year. Though we are not yet seen record peaks as yet, the present breakout is significant on two counts.

Firstly, this breakout has been accompanied by such huge volumes last seen only in March, after which the stock had risen over 20 percent. Secondly a Cup and Handle pattern in formation for the last 4.5 years looks to have matured.

We expect the stock to move towards Rs 149 within the next six months, with interim targets of Rs 121 – 129. It would be prudent to enter the stock on pullback to Rs 113-110 region. All long positions may be protected with stop-loss placed below Rs 103.

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