Trade Spotlight | What should you do with Sobha, Poonawalla Fincorp, Laurus Labs on Friday?

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The market extended its northward journey for the second day in a row and finally closed above the 16,000 mark after a struggle through the last few days on July 7, backed by buying in most of sectors, barring FMCG. Global cues were also positive after FOMC minutes and fall in oil prices.

The BSE Sensex jumped more than 400 points to 54,178, while the Nifty50 climbed 143 points to 16,133 but formed Doji kind of pattern on the daily charts which indicated some indecisiveness among bulls and bears.

The broader markets also joined the bulls party with the Nifty Midcap 100 and Smallcap 100 indices gaining 1.35 percent and 1.57 percent, while the cooling down of volatility below 20 levels also aided the sentiment, down by 5.25 percent to 19.20 levels.

Stocks that were in action included Sobha, which surged 10 percent to Rs 641 and formed bullish candle on the daily charts with large volumes, sustaining an uptrend for the third straight session, especially after formation of a Morning Star kind of pattern on Tuesday (not exactly).

Poonawalla Fincorp jumped 8 percent to Rs 248.60 and formed bullish candle on the daily charts with much higher than average volumes, while Laurus Labs shares gained 4.6 percent at Rs 491, witnessing a bullish candle formation on the daily charts with above average volumes.

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

Sobha

The stock has rallied 10 percent on July 7. On Thursday, the stock opened with gap up and held the positive momentum throughout the day. On the short term time frame stock has formed strong price volume uptrend continuation formation. The texture of the pattern suggest positive momentum will continue in the near term, if it succeeds to trade above Rs 620 level.

For the trend following traders, Rs 620 would be the sacrosanct level, and trading above the same we can expect uptrend continuation wave till Rs 680-700.

Poonawalla Fincorp

After a short term correction, the stock took the support near 200 days SMA Rs 231 (simple moving average) and reversed sharply. On last Thursday, it rallied over 8 percent.

It also formed long bullish candle on daily charts. Unless it is trading below Rs 235, positional traders retain an optimistic stance and look for a target Rs 265-270. Fresh buying can be considered now and on dips, if any between Rs 250 and Rs 243 levels with a stop-loss below Rs 235.

Laurus Labs

On last Thursday, the stock rallied nearly 5 percent. After a strong opening, it successfully cleared the 20 days SMA Rs 478 (simple moving average) and post breakout it intensified the positive momentum throughout the day.

A promising price volume reversal formation indicating further upside from the current levels. For the swing traders now, 20 days SMA or Rs 480 would act as a trend decider level. Above which it could move up to Rs 510-520. On the flip side, below Rs 480 uptrend would be vulnerable.

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.