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Trade Spotlight | What should you do with Schaeffler India, Welspun Corp, Finolex Cables on Monday?

On the weekly and monthly time frame, Welspun Corp is trending higher forming a series of higher tops and bottoms indicating strong up trend. However with Friday's up move the stock has confirmed "Symmetrical Triangle" breakout at Rs 220 levels. This breakout is accompanied with huge volume spurt indicating increased participation.

August 01, 2022 / 06:39 AM IST
 
 
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The market had a strong gap-up opening and clocked more than 1 percent gains on July 29, extending rally for third consecutive session following rally in global counterparts. Buying across sectors, barring PSU banks, also supported the market.

The BSE Sensex climbed more than 700 points to close near 57,600 levels, and the Nifty50 jumped more than 200 points to 17,158, while the participation was seen in the broader space as the Nifty Midcap 100 index gained 1.4 percent and Smallcap 100 index rose 1.7 percent on positive breadth.

About two shares advanced against every declining share on the NSE.

The volatility declined further, helping the bulls stay at Dalal Street. India VIX, which measures the expected volatility in the market, fell by 2.71 percent to 16.55 levels.

Stocks that were in action included Schaeffler India which climbed 7.6 percent to end at record closing high of Rs 2,780.50 and formed large bullish candle on the daily charts (especially after high wave candle formation in previous session) though there was a bit of profit booking at higher levels. The volume was very high on Friday. The stock has been trading in upper band of Bollinger Band on the daily scale, while on the monthly scale, it has been in an uptrend and also maintained upper band of Bollinger band since the start of 2021. There was large bullish candle formation on the weekly as well as monthly scale.

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Finolex Cables rallied 6.75 percent to Rs 424.55, the highest closing level since February 23 and formed big bullish candle on the daily charts with very large volumes. In fact, with the Gap up opening and strong rally, it has decisively crossed all previous resistance points seen in July.

Welspun Corp stock rose 6.4 percent to Rs 226 and formed large bullish candle on the daily charts following high wave candle in previous session.

Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:

Schaeffler India

The stock is in strong uptrend across all the time frames forming a series of higher tops and bottoms. The stock is well placed above its 20, 50, 100 and 200 days simple moving average (SMA) and averages are also iching up along with the prices. This reaffirms the bullish trend.

The last couple of sessions' rising volumes signifies increased participation in the rally. The daily, weekly and monthly strength indicator RSI (relative strength index) is in bullish mode indicating rising and sustained strength on a short to medium term time frame. The daily and weekly "Bollinger Band" buy signals shows increased momentum.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 2,930-3,050 with downside support zone of Rs 2,580-2,400 levels.

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Finolex Cables

Since past six months, the stock was consolidating within broad trading range (Rs 423-345) levels, however, with Friday's strong upmove the stock has witnessed strong breakout along with the huge volumes.

On the daily and the weekly time frame the stock has witnessed a shift of trend to the upside. This buying momentum was observed from the 20-day SMA which remains a positive sign. The stock is sustaining above its 20, 50, 100 days SMA which supports bullish sentiments ahead.

The daily and weekly strength indicator RSI is in bullish mode indicating rising and sustained strength on a short to medium term time frame.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 455-475 and with downside support zone of 405-390 levels.

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Welspun Corp

On the weekly and monthly time frame, the stock is trending higher forming a series of higher tops and bottoms indicating strong up trend. However with Friday's up move the stock has confirmed "Symmetrical Triangle" breakout at Rs 220 levels. This breakout is accompanied with huge volume spurt indicating increased participation.

The stock is well placed above 20, 50, 100 and 200-days SMA which supports bullish sentiments. The daily, weekly and monthly strength indicator RSI is in bullish mode indicating rising and sustained strength across all the time frames. The daily "Bollinger Band" buy signals indicate increased momentum.

Investors should buy, hold and accumulate this stock with an expected upside of Rs 240-255 and with downside support zone of Rs 203 levels.

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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
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