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Trade Spotlight | What should you do with Tata Chemicals, City Union Bank, Elgi Equipments on Thursday?

Tata Chemicals share price jumped 12.2 percent to Rs 1,074, the highest closing level since October 19, 2021. The stock had a robust gap up opening and large bullish candlestick pattern formation on the daily charts with significantly higher volumes. It has decisively broken the long down sloping resistance trend line, adjoining October 18, 2021 and May 5, 2022, may be indicating bullish phase. Now the stock is around 7-8 percent away from its record high of Rs 1,158.

August 11, 2022 / 08:09 AM IST
 
 
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After a day's rally, the market remained rangebound amid volatility on August 10 with the Nifty50 trading in a range of around 100 points and managing to hold 17,500 mark at close, ahead of US inflation data that came in at 8.6 percent for July, lower compared to 9.1 percent in June.

The BSE Sensex fell 36 points to 58,817, while the Nifty50 gained 10 points to 17,535 and formed Hanging Man kind of pattern on the daily charts.

However, the broader space was moderately under pressure with the Nifty Midcap 100 and Smallcap 100 indices declining 0.16 percent and 0.35 percent respectively on weak breadth.

Stocks that were in action and outpaced broader markets included Tata Chemicals and City Union Bank which were top gainers in the futures & options segment on Wednesday.

Tata Chemicals share price jumped 12.2 percent to Rs 1,074, the highest closing level since October 19, 2021. The stock had a robust gap up opening and large bullish candlestick pattern formation on the daily charts with significantly higher volumes. It has decisively broken the long down sloping resistance trend line, adjoining October 18, 2021 and May 5, 2022, may be indicating bullish phase. Now the stock is around 7-8 percent away from its record high of Rs 1,158.

Close

City Union Bank climbed 8.5 percent to Rs 176.7, the highest closing level since October 26, 2021. The stock also saw healthy gap up opening and formed robust bullish candle with large volumes on the daily charts. It has strongly broken its long down sloping resistance trend line, adjoining November 18, 2020 and October 26, 2021.

Elgi Equipments share price rose 3.35 percent to Rs 447.70, the record closing high. The stock has seen a bullish candle on the daily charts with above average volumes.

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:

Tata Chemicals

On the weekly chart, the counter is near resistance levels of approximately Rs 1,100-1,120. Over the last one-and-half-month, the stock has seen 40 percent appreciation. If one is already holding, then one should book some profits between Rs 1,090-1,100 levels.

Last but not the least, fresh buying in the counter is not advisable at the current market price, as daily MACD (moving average convergence and divergence) is over stretched at higher levels which is a sign of exhaustion.

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Elgi Equipments

What a great setup we are having in Elgi Equipments. The all-time high of Rs 422 has taken out comfortably and in current week, it has taken support near Rs 422 levels and then reversed from said levels. On the weekly chart, it is in the process of completing its N-wave near Rs 510 levels.

Thus one can hold and add at current levels with upside view till Rs 515 and plausible support is seen at Rs 420.

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City Union Bank

On monthly chart, City Union Bank has been making higher highs and higher lows since last couple of months. Also volume is picking up on monthly basis which is complementing its up move.

On indicator front, monthly MACD has given bullish divergence along with bullish crossover which further confirms possible upside. Also monthly RSI (relative strength index) has taken support from Rs 40 levels and bounced back nicely which further confirms upside in counter.

One can buy in small tranche at current levels and buy another tranche at around Rs 160 levels. Upside is expected till Rs 210 and support is seen around Rs 150.

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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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