Tata Consumer
True to this pattern, Tata Consumer has recently shown a decisive breakout, marked by substantial trading volume. This breakout suggests increased investor interest and confidence, indicating a potentially attractive buying opportunity at this juncture.
From a technical analysis perspective, the Daily Relative Strength Index (RSI) has reversed from the 50 level. This reversal is a positive sign, as the 50 level on the RSI often acts as a pivotal point, with a move upwards indicating strengthening momentum and a bullish outlook.
The combination of the breakout and the RSI reversal suggests that the stock is poised for further gains. Based on these technical indicators, it is advisable to consider adding long positions in Tata Consumer within the Rs 1,165-1,180 range. This range offers a strategic entry point, with the potential for the stock price to rise to the target of 1225, reflecting an attractive upside potential. To manage risk effectively, it is recommended to set a stop-loss at Rs 1,145 on a daily closing basis.
SBI Card
Despite this steep drop, SBICARD has managed to stabilise around the Rs 675 level over the past week, forming a sustained support base. This stabilization is a critical sign of potential recovery. Notably, during this period, a bullish ALTERNATE pattern has emerged near the Rs 680-710 level, further confirming positive market sentiment. This pattern indicates that the market may be shifting from a bearish to a bullish phase, suggesting a potential rebound.
Moreover, the analysis of the daily Relative Strength Index (RSI) reveals a bullish divergence, which is a strong technical indicator signalling a favourable outlook for the stock. A bullish divergence occurs when the stock price hits a new low while the RSI hits a higher low, indicating that the selling momentum is weakening.
Considering these positive technical indicators and chart patterns, investors might find it prudent to initiate buy positions within the range of Rs 720 to 735. The upside objective for this strategy is targeted at 800, suggesting potential gains as the stock price recovers. To manage risk effectively, a stop-loss order should be set at Rs 690 on a daily closing basis
LIC
Over the past few weeks, LIC has demonstrated a consistent upward trajectory in its stock price, characterised by forming higher highs and higher lows. This pattern is indicative of strong market performance and investor confidence. Recently, LIC has broken above its previous bearish trendline and is currently trading at approximately Rs 1,105.
According to technical analysis, the Relative Strength Index (RSI) on the daily chart has surged into the 70 level, signalling robust upward momentum. This uptrend suggests a favourable outlook for potential investors.
Given these positive indicators, investors are advised to consider purchasing LIC shares within the range of Rs 1,085 to 1,110. This range is identified as optimal for entry, with an anticipated target price around Rs 1,200, reflecting potential future gains. To mitigate risk, it is recommended to implement a stop-loss strategy, setting an order near Rs 1,040 based on daily closing prices.
(Jigar S Patel is a senior manager of equity research at Anand Rathi. Views expressed are his own.)
First Published: Jul 18 2024 | 6:28 AM IST
