Schaeffler:
Schaeffler experienced a significant decline after reaching its peak near Rs 4,950, dropping approximately 1,155 points, which translates to a substantial 23 per cent decrease in price. Currently, the stock appears to have found support around its 100-day Exponential Moving Average (DEMA), forming a double bottom pattern.
Additionally, the Relative Strength Index (RSI) on the hourly chart is showing bullish divergence, suggesting a potential reversal in the stock’s momentum. In the most recent trading session, Schaeffler’s stock rebounded by about 5 per cent, accompanied by a surge in trading volume.
This substantial increase in volume indicates a possible positive shift in market sentiment towards the stock. Given these technical signals, investors might consider buying the stock in the price range of Rs 3,950 to Rs 3,975. The suggested upside target is Rs 4,350, with a stop-loss set at Rs 3,770 based on a daily closing price to manage risk.
Nykaa:
Nykaa after a brief period of consolidation around its 21- and 50-day Exponential Moving Averages (DEMA), has successfully surpassed its previous high of approximately Rs 184. This consolidation phase indicates the formation of a robust base, setting the stage for further upward movement.
From a technical analysis perspective, the Daily Relative Strength Index (RSI) has rebounded from the 50 level, signalling a potential increase in bullish momentum over the coming sessions. Based on these observations, it is recommended to buy Nykaa within the price range of Rs 190-195. The anticipated upside target is Rs 220, with a stop-loss set at Rs 178 based on a daily closing price to safeguard against potential downside risks.
SBICARD:
Following a peak near the Rs 933 level, SBICARD experienced a significant downturn, with a sharp decline of nearly 280 points, representing a substantial decrease of approximately 30 per cent in its overall value. Despite this steep drop, SBICARD has managed to stabilize 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 705 to Rs 715. The upside objective for this strategy is targeted at Rs 800, suggesting potential gains as the stock price recovers. To manage risk effectively, a stop-loss order should be set at Rs 665 on a daily closing basis.
(Jigar S Patel is a senior manager of equity research at Anand Rathi. Views expressed are his own.)
First Published: Aug 12 2024 | 6:23 AM IST
