We spoke to analysts on how one should trade stocks that were in focus in the previous trading sessions based on derivative and technical data:
Analyst: Sudeep Shah, Deputy Vice President and Head of Technical & Derivatives Research, SBI Securities told ETMarkets
Nifty continued in its narrow range bound trading pattern for the second day in a row with index trading in a 60-80 points range for both the days. Post a negative opening below 20 EMA zone, now the next important support zone would be 19,230-19,250 zone which is the 38.2% Fibonacci retracement of the rebound from 18837 to 19,450.
Crucial resistance now is being developed around 19,420-19,440 zone sustaining above which Index could witness an up move up to 19525-19540, which represents the 50% retracement of the entire downswing from 20222 to 18837. Only If Nifty surpasses and sustains above 19550, a fresh rally up to 19730-19780 could be witnessed. Conversely, below 19230, the index could witness profit booking down to 19160, followed by 19110.
Significant Put OI was built up at 19,400 and 19,200 strikes, while on the calls front, 19,500 & 19,800 witnessed considerable Open Interest additions. The overall range for the day could be 19,230-19,250 on the downside & 19,470-19,510 on the upside.
Metropolis Healthcare gives horizontal trendline breakout
The stock has marked a low of 1171 on March 31, 2023 and thereafter started marking the sequence of higher tops and higher bottoms. The stock has surged nearly 39 per cent in 150 trading sessions. On Thursday, the stock gave a horizontal trendline breakout on daily scale. This breakout was supported by volume spurt.
Currently, the stock is trading above its short and long-term moving averages. These averages are on a rising trajectory. The daily RSI is in the super bullish zone as per RSI range shift rules. The daily MACD stays bullish as it is quoting above its zero line and signal line. The MACD histogram is suggesting pickup in upside momentum.
On the derivative front, long build up is visible as cumulative OI has surged by 3% and price has surged by 5.70%. Hence, we recommend to accumulate the stock in the zone of 1625-1615 level. On the upside, it is likely to test the level of Rs 1690, followed by Rs 1730 in short-term. Maintain a stop-loss at Rs 1570 level.
L&T bounces from support zone
The stock has marked the high of 3115 and thereafter it has witnessed throwback. The throwback was halted near 23.6% Fibonacci retracement level of its prior upward rally (Rs 2144-3115) which is placed at 2850 and it coincides with the 50-day EMA level. The stock has formed a strong base near this support zone and resumed its northward journey. The reversal from the support zone is confirmed by relatively higher volume.
The momentum indicators and oscillators are also supporting the overall bullish chart structure. The daily RSI has given bullish crossover. The fast stochastic is also trading above its slow stochastic line. Further, the signal line of MACD has crossed the zero line and the histogram has turned bullish.
On the derivative front, short covering is clearly visible as cumulative OI has dipped by 2.55% and price action being positive. These factors are indicating bullish momentum in stock. Hence, we recommend to accumulate the stock in the zone of 3030-3000 level with the stop loss of Rs 2930 level. On the upside, it is likely to test the level of Rs 3150, followed by 3210 level in the short-term.
Apollo Hospital gives Double Bottom neckline breakout
On Thursday, the stock gave a neckline breakout of the Adam and Adam Double Bottom pattern on daily scale. This breakout was supported by robust volume of more than double of 50 days average volume, indicating strong buying interest by market participants. The 50-days average volume was 4.34 lakh while on Thursday the stock registered a total volume of 10.32 lakh. In addition, the stock has formed sizeable bullish candle on breakout day, which adds strength to the breakout.
The momentum indicators and oscillators are also supporting the overall bullish chart structure. The trend strength indicator, Average Directional Index (ADX), is above 25 on the daily chart, which indicates strength. The +DI is much above the -DI. This structure indicates bullish strength in the stock.
On the derivative front, strong long build up is visible as cumulative OI of current, next and far series has surged by 7.50% and price has surged by 3.55%. From 5250 to 5800 strikes, the highest call buying was witnessed. On the put side, 5500-4700 strikes witnessed a short build-up. This clearly indicates bullish momentum in stock.
Hence, we recommend buying this stock with the stop loss of Rs 5100 level. As per measure rule of Double Bottom pattern, the upside target is placed at 5640 level for short-term.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
