Karan Pai, CMT, Technical Analyst, GEPL Capital
The market stayed in the bear trap on December 6, despite positive global cues, with the benchmark indices declining 1.65 percent each under selling pressure across sectors.
The Nifty50 closed below the psychological 17,000 mark, falling 284 points to 16,912, while the BSE Sensex plunged 949 points to 56,747. The Nifty Midcap 100 and Smallcap 100 indices corrected 1.42 percent and 1.09 percent.
Stocks that were in focus include HFCL, which was locked in the 10 percent upper circuit at Rs 78.30, and Indo Count Industries, which surged 9.91 percent to Rs 266.20.
Tanla Platforms was also in focus, rising 4.86 percent to Rs 1,595.50 and Texmo Pipes was frozen at 10 percent gains to close at Rs 75.55.
Here’s what Karan Pai of GEPL Capital, recommends investors should do with these stocks when the market resumes trading today:
HFCL on the weekly time frame had been moving in a range and holding the Rs 67.80 mark since the past couple of months until it massively outperformed the broader markets and moved high towards the upper end of the consolidation range on December 6.
During this entire consolidation phase, the 14-period RSI (relative strength index) has managed to sustain above the 50 mark. It can now be seen moving higher towards the overbought level, indicating increasing bullish momentum in the prices.
Looking at the prices action and the technical parameters, we expect the stock to move higher and reclaim the previous lifetime high of Rs 95 in the coming sessions.
Investors holding the stock can continue to hold the stock with a target of Rs 95 but maintain a strict stop loss of Rs 67 on a daily closing basis.
Indo Count Industries halted its lower low pattern in the week started on November 29 near the 38.2 percent retracement level of the up move from Rs 113-315. This level also happens to be a support cluster and the prices seem to have bounced off this level earlier.
The RSI plotted on the daily time frame have formed a bullish crossover, hinting towards increasing bullish momentum in the prices.
The price action hints that a bottom might be in place, and the prices might move towards the previous swing high of Rs 315.
Investors can hold on to Indo Count Industries at this point with a target of Rs 315 and maintain a stop loss of Rs 223 on closing basis.
Tanla Platforms has been in a strong up move ever since it broke the Rs 1,000 mark.
The Bollinger bands plotted in the weekly time frame can be seen expanding as the prices move higher, indicating volatility expansion as the prices ride the upper Bollinger bands.
The stock now seems to be moving higher after finding support near the 20-week SMA (simple moving average). Looking at the price action we might see the prices move higher towards the previous swing high of (Rs 1,640) immediately. If the prices breach the Rs 1,640 mark, we might even see the Rs 1,727 level tested.
Investors can continue to hold the stock and maintain a stop loss of Rs 1,380 on closing basis.
Texmo Pipes has massively outperformed the broader market and breached above the May 2021 highs of Rs 65.80.
On the indicator front, the RSI plotted on the weekly time frame can be seen moving higher towards the overbought level after forming a bullish hinge near the 50 mark, indicating increasing bullish momentum in prices.
Going ahead, we expect the stock to test the Rs 80.15 mark immediately, post which we might see the stock move higher towards the Rs 90 level.
We would advise the investors to hold on to their positions with a strict stop loss of Rs 65 on a daily closing basis.
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