We have collated a list of stocks which remained in focus in last few sessions because of their price action
Indian markets closed flat but with a positive bias on August 19. Sensex rose over 50 points while Nifty closed with modest gains of 6 points.
Global trade optimism and expectations of fresh stimuli triggered risk-on sentiment in equity markets across the globe. However, selling pressure at higher levels pushed Nifty below 11,100 towards the closing.
We have collated a list of stocks that remained in focus on Wednesday because of their price action. The technical outlook is limited to 2-3 weeks:
Analyst: Romesh Tiwari, Head of Research, CapitalAim
Indiabulls Housing Finance: Stock down over 30 percent in 2019| Avoid fresh buying
Indiabulls Housing Finance came under pressure last week after the global rating agency Moody’s downgraded the company’s long-term corporate family rating to Ba2 from Ba1, while changing its outlook to negative from stable
The stock, after touching its 52-week low placed at Rs 425.50 on August 8 witnessed a rebound which took the stock towards Rs 619 in August 14.
The wild gyrations suggest it is a highly volatile stock and should be traded only by high-risk profile traders. On the daily chart, it is still giving a sell signal by MACD (12, 26) and price is also trading below 20-DMA and DEMA.
The low of Rs 425-450 level may act as strong support for the stocks in the short term and can be used as a stop loss if bought around Rs 500 for an initial target of Rs 700 in the medium to long term. Fresh buying is not advised in the stock.
IDBI Bank: Stock rebounded 12 percent but is still down 60 percent in 2019
IDBI Bank rebounded from lows and closed 12.6 percent higher on August 19, after falling about 10 percent in the week gone by.
Last week, the stock hit a multi-year low of Rs 23.95. It is technically weak, and in an oversold zone, which may result in a technical bounce back.
On the daily chart, RSI (14) at 21.095 and ADX (14) at 70.383 are indicating that it is in an oversold zone but it may go down further or remain rangebound before showing any substantial upside.
IDBI Bank can be bought for a bounce towards 27-28 with a stop loss placed at 22.50 in the short term.
Essel Propack: Stock plunged nearly 30 percent since July; stay away for short term
The volume of trading in this stock makes it vulnerable to sharp changes. On August 16, it made a low of Rs 89 but then recovered to close at Rs 99.75 on August 16.
On the daily chart, it is very weak (MACD (12,26) at -5.480) and may see some more selling on any pullback towards Rs 108-110.
We suggest investors to buy the stock for long-term near Rs 90 and keep a stop loss at 83.50 for a target of Rs 130-140. However, for the short-term, the best strategy is to stay away from the stock.
Tata Motors: A contra play! Stock plunged about 30 percent in 1 month
Tata Motors witnessed a sell-off in the last one month thanks to a fall in demand, dismal June quarter results, muted July sales numbers, and ratings downgrade. Last week, CRISIL downgraded its long term rating amid weakening risk profile of Jaguar Land Rover.
After a large sell-off, the stock has been sliding to near multi-year low and is on the verge of becoming a double-digit stock.
The stock is in an oversold zone (ADX(14) at 76.951), but most of the other technical indicators on the daily chart like MACD at -9.470, and RSI at 31.116, are still indicating sell on the stock, we could see some more pressure.
This can be a contra play for a risk seeking traders, for a bounceback of about 5-10 percent from the recent low of Rs 116.50.
Traders can look for a target of Rs 127-134 in the short term with a stop loss placed at Rs 110. The risk-to-reward ratio for this stock is more favourable for long-term play, but I would like to see it consolidating before initiating a buy for a longer-term target of Rs 150.
UPL: Down over 10 percent in a month| can go further down towards Rs 425-440
The stock has been under pressure in the last one month. The stocks witnessed selling pressure after it reported a 57.8 percent drop in June quarter consolidated profit at Rs 220 crore.
The stock could go down further to touch new lows of Rs 425-440 from here as technicals are indicating a sell on the stock.
Traders can sell the stock around Rs 570 with a stop loss of Rs 610, and a target of Rs 500-490 in the short to medium-term. At the current level of Rs 550, it is in the midway of its range between Rs 400-600.