Three buy and one sell

Published March 21, 2019

Wishes of Holi to all readers!

The market showed a flat development and Nifty 50 (NIFTY) ended the day at 11521 points or 0.10 per cent down from Tuesday's close. The index thereby pressed its breaks after seven days of gains.

Few Nifty 50 stocks including Reliance Industries are making all time highs which are pushing the index higher and closer to its earlier peak. But same is not the case with the Midcap and Smallcap indices. Where Nifty Midcap 100 index is still trying to recover from its lows in February, Nifty Smallcap 100 has given a breakout from the falling trend channel and a double bottom formation at the same time. This clearly suggests that the mid and small cap stocks must have really good interest from the investors to catch up with large cap stocks.

ICICI Lombard General (ICICIGI.NS) Close: 979.85

ICICI Lombard General is inside a rising trend channel in the medium term and has given a positive breakout from the rectangle formation. Further rise to 1157 or more is signalled. The stock has support at rupee 920.

As per Investtech's research, stocks that have given buy signal, break upwards from rectangle formation have given an annualized return of 21.1 per cent and excess return of 8.0 percentage points over benchmark index.

Recommendation one to six months: Positive

Punjab National Bank (PNB.NS) Close: 93.55

Punjab National Bank fell more than 70 per cent from its peak in October 2017 and has now started to correct upwards. Two weeks back the stock broke out of the falling trend channel and gave a buy signal from an inverted head and shoulders formation. Very recently the stock has also broken above its resistance of 90 rupees. Further rise to 123 or more is signalled. Support is around 90 and 84.50 rupees in the short term.

Volume balance is positive and the momentum indicator RSI is rising and above 70. These indicators together support the rise in price. However, one must be careful as volatility risk is high with 24 per cent on a monthly basis.

Recommendation one to six months: Positive

Escorts Limited (ESCORTS.NS) Close: 821.55

Escorts Limited has broken out of the falling trend channel and multiple resistance levels in the medium term. The stock had given a sell signal from a head and shoulders formation last year and fell sharply. But over the course of the last six months the stock made higher tops and higher bottoms to rise above the resistance of 800 rupees. Further rise in price is expected.

RSI is above 70 after a good price increase the past weeks. The stock has strong positive momentum and further increase is indicated. The volume balance indicator is also positive, as more buyers have bought the stock at rising prices and number of sellers has decreased when the stock reacted downwards. The stock is overall assessed as technically slightly positive for the short to medium term.

Recommendation one to six months: Positive

Sanofi India Limited (SANOFI.NS) Close: 5599.50

Sanofi India Limited has broken down from the rising trend channel in the medium term. In the first place that signals a slower rate of rise or a development in to more of a sideways trend. However, in this case the stock has given a sell signal from a double top formation, which is a top reversal pattern. Further downside to price target of 4600 rupees or less is signalled.

There is support around 5240 and 4830 rupees, but in case of a reversal there is resistance between 5700 and 6070. Short term volume balance is negative and the momentum indicator RSI-curve is falling and under 30. This suggests that investors are selling when the price falls and less buy interest during reversals.

In the long term chart, a similar price formation has appeared and the support is around 5000 and next at 4700 rupees. The stock is overall assessed as technically negative for the short term.

Recommendation one to six months: Negative

 

The analyses are based on closing price as per March 20, 2019. Maintaining proper stop loss is always recommended.

Written by

Kiran R. Shroff

Analyst - Investtech

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Archive:

12 March: Cement stocks are posing good opportunity

08 March: Clear breakout and reversal from intermediate downtrend

07 March: Deepak Nitrite Limited looks promising to enter into a trade

06 March: Three buy candidates for medium to long term

28 February: Breakout in these three stocks invites for early opportunity

26 February: Two buy opportunities for the near term future

21 February: Stocks with RSI above 70, based on our research 

19 February: Close to selling point, time to be cautious 

15 February: These two sugar stocks look promising 

14 February: Three short to medium term opportunities 

08 February: One buy and one sell in stocks while index suggests caution 

06 February: One buy and one sell, short to medium term opportunities 

01 February: Upside breakout from price formations 

30 January: Buying opportunity: Reversing from trend channel support 

9 January: One positive and one to stay away from 

2 January:  A good investment opportunity 

2018

21 December:  Good buying opportunities

14 December:  Positive on these three stocks

11 December:  One buy and one sell signal

07 December:  Sell Signals in Three Big Stocks

04 December:  Highest scorer of our Top 50 list

30 November: Positive stocks with 5-11 per cent upside potential

28 November: Buy signal on high volume

27 November: One Buy and One Sell Signal

23 November: Fear dominates these stocks

21 November: Sell signal, time to stay away

20 November: Early opportunity from short term buy signal?

16 November: Two Buy Signals and One Sell Signal

15 November: Buy signal in this one

14 November: Solid buy signal

13 November: Big auto stocks comparison

09 November: What to wait for?

06 November: Banking stocks look positive

02 November: Positive on this one

01 November: TECHM, NIFTY50 and Hausse

31 October: What are investors thinking?

30 October: Bullish on these three stocks

26 October: Three potential candidates to ride on

24 October: Three big Metal stocks, Seasonal variation

22 October: Among top performers on our Top 50 list

18 October: Three stocks investors should stay away from

17 October: Flowing against the tide

16 October: Positive on these 2 stocks

11 October: Over 45 per cent rise

10 October: 3 negative stocks

9 October: The Indian banking space

5 October: Nifty closes at a crucial level

2 October: Price formations in the long-term charts

28 September: Positive on Biocon Limited

26 September: Bearish outlook

25 September: 3 solid buys

20 September: State Bank of India story!

18 September: Weekly technical analysis

"Investtech analyses the psychology of the market and gives concrete trading suggestions every day."

Espen Grønstad
Partner & Senior Advisor - Investtech
 


Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.


Investtech guarantees neither the entirety nor accuracy of the analyses. Any consequent exposure related to the advice / signals which emerge in the analyses is completely and entirely at the investors own expense and risk. Investtech is not responsible for any loss, either directly or indirectly, which arises as a result of the use of Investtechs analyses. Details of any arising conflicts of interest will always appear in the investment recommendations. Further information about Investtechs analyses can be found here disclaimer. The content provided by Investtech.com is NOT SEC or FSA regulated and is therefore not intended for US or UK consumers.

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