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Trade Spotlight | What should you do with Sumitomo Chemical, Indo Tech Transformers, Britannia, Rain Industries on Thursday?

What a fantastic setup we are having in Rail Industries, precise Bullish Butterfly pattern on daily chart with pair of spinning bottom near potential reversal zone of Rs 165-170.

May 05, 2022 / 07:18 AM IST
 
 
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The Reserve Bank of India's surprised move of 40 bps hike in repo rate and 50 bps in cash reserve ratio citing inflation worries pulled down the markets sharply on May 4. The BSE Sensex fell more than 1,300 points to 55,669, and the Nifty50 plunged nearly 400 points to 16,671.

The selling was seen across sectors. Nifty Bank, Auto, Financial Services, Metal and Pharma indices were fallen 2-3 percent, while IT and FMCG corrected 1.1 percent and 1.7 percent respectively.

The broader markets also participated in the bear run with the Nifty Midcap 100 and Smallcap 100 indices declining more than 2 percent each following weak breadth. About six shares declined for every share advancing on the NSE.

Stocks that were in focus or bucked the trend included Sumitomo Chemical India which ended at record closing high of Rs 450.60 with 3 percent gains; and Indo Tech Transformers which was locked in 10 percent upper circuit at Rs 248.85.

Among others, Rain Industries and Britannia Industries were among the top three gainers in the futures & options segment, rising 5 percent to Rs 175.70 and climbing 3.5 percent to Rs 3,385.5 respectively.

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:

Sumitomo Chemical India

Though the said counter looks lucrative at current levels, but one needs to pay attention on weekly chart since breakout is not clean as of now.

Already having position then one should book partial profits. If considering fresh buying then wait for counter to close above Rs 460 on weekly closing basis. Till then wait and watch.

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Indo Tech Transformers

Since last couple of months Indo Tech has been trading in a range of Rs 200-240, at current juncture it has given clean breakout from mentioned range with massive volume following it.

On indicator front MACD (Moving average convergence divergence) daily has given bullish crossover near zero along with daily RSI (relative strength index) bouncing back from 50 and currently placed at 70 indicating strength in the counter.

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Britannia Industries

Britannia has corrected almost 25 percent from its high of Rs 4,153 (made on September 2021). On weekly chart it has formed bullish AB=CD pattern with PRZ (potential reversal) zone of Rs 3,100-3,150.

Also near PRZ it has consolidated for some time. One can buy this counter immediately with potential upside possible Rs 3,800 with plausible support of Rs 3,100-3,150.

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Rain Industries

What a fantastic setup we are having in RAIN, precise Bullish Butterfly pattern on daily chart with pair of spinning bottom near potential reversal zone of Rs 165-170.

On daily time frame, RSI is displaying impulsive behaviour near oversold zone of 30 along with volume is picking up near PRZ. From investor perspective, these are lucrative levels from where one can add in small quantity and add another tranche at Rs 165 levels.

Upside is seen till Rs 200-210 levels with Rs 155 as a good support.

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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