Trade Spotlight | What should investors do with Jindal Steel Power, Sun Pharma, Trident?

Here’s what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today.

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The market witnessed volatility throughout the session on January 13 and sustained uptrend for fifth consecutive day despite mixed trend in global peers. The uptrend was led by Metals, Pharma, select Auto, FMCG and IT stocks, however, selling pressure in banks capped upside.

The BSE Sensex climbed 85 points to close above 61,200 levels, while the Nifty50 rose nearly 50 points to settle above 18,250 levels. The broader markets with more than six-tenth of a percent outperformed benchmark indices on Thursday.

Stocks that were in focus included Jindal Steel & Power, which was the third biggest gainer in the futures & options segment, rising 5.84 percent to Rs 413.20, and Sun Pharmaceutical Industries was the third biggest gainer in Nifty50, climbing 3.5 percent to Rs 865.50.

Trident also witnessed buying interest as the stock ended at record closing high of Rs 61.75, freezing at 5 percent upper circuit.

Here’s what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:

Jindal Steel & Power

After a medium term price correction, eventually the stock took the support near Rs 340 and reversed sharply. Post reversal, the stock maintained higher bottom formation which is broadly positive.

Currently the stock is trading near 200-day SMA (simple moving average) and it also formed long bullish candle which support further uptrend from current levels.

For the positional traders, now Rs 380 trend line level would be the ideal support level. The texture of the chart suggest, positive momentum is likely to continue up to Rs 430-450 if the stock succeed to trade above the same.

Sun Pharma

The stock has rallied over 3.5 percent on January 13, post strong opening quickly clear the resistance of Rs 845 and comfortably trading above the same. Despite tepid market conditions, Sun Pharma maintained its strong momentum throughout the day.

On the short term time frame, the stock has formed promising higher bottom formation. The structure of the pattern suggest breakout action will continue in the near term if stock succeeds to trade above Rs 840 level.

For the swing traders, Rs 840 would be the sacrosanct level, trading above the same we can expect uptrend continuation wave up to Rs 890-910.

Trident

The stock hit one more 5 percent upper circuit on January 13. From last three days, the stock is hitting upper circuit. The stock has rallied from Rs 52 to Rs 61 within a very short period of time. That rally was price dominating and supported with modest volume activity.

On daily and weekly charts, the stock has formed Higher High and Higher Low series pattern which suggest uptrend momentum likely to persist in the near future. We are of the view that, the texture is still in to the positive side but due to temporary overbought situation profit booking at higher levels is not ruled out.

Short term traders should remain cautious and very selective as there is risk to get trapped out at higher levels.

For the trend following traders, 55 or 9-day SMA would be the sacrosanct support level, above the same uptrend formation is likely to continue till Rs 65-75. However, below Rs 55 traders may prefer to exit out from trading long positions.

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