Trade Spotlight | What should you do with Poonawalla Fincorp, Kalyan Jewellers, PNB on Tuesday?

Poonawalla Fincorp surged 14 percent to Rs 280.5 and formed big bullish candle on the daily charts, in fact engulfing both previous red candles, with large volumes. The stock has seen a decisive breakout of big horizontal resistance trend line adjoining February 16 and December 23.

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The market had a strong start to the monthly F&O expiry week on December 26 as the benchmark indices clocked more than 1 percent gains with the Nifty50 getting back above the psychological 18,000 mark, supported by short covering and value buying after recent sharp correction.

The BSE Sensex rallied more than 700 points to 60,566, while the Nifty50 jumped over 200 points to 18,015, and formed long bullish candle on the daily charts.

The broader markets performed much better than benchmarks on healthy breadth. The Nifty Midcap 100 index rallied 2.7 percent and Smallcap 100 index jumped 3.8 percent as about six shares advanced for every declining share on the NSE.

All sectors, barring pharma, participated in the run up on Monday. Amongst stocks that were in action and performed strong included Poonawalla Fincorp which surged 14 percent to Rs 280.5 and formed big bullish candle on the daily charts, in fact engulfing both previous red candles, with large volumes. The stock has seen a decisive breakout of big horizontal resistance trend line adjoining February 16 and December 23.

Kalyan Jewellers India shares surged 13 percent to Rs 122, almost recouping previous day’s losses and formed healthy bullish candle on the daily charts. On hourly charts, the stock has seen a nice breakout of downward sloping resistance trend line in last hour of trade on Monday. In previous session, the stock has taken a good support at Rs 104 level, the low point seen in the start of December month.

Punjab National Bank was also in action, gaining nearly 8 percent at Rs 53.50 and formed bullish engulfing kind of candlestick pattern on the daily charts with above average volumes. The stock has seen a nice breakout of small downward sloping resistance trend line adjoining December 15 and December 21.

Here’s what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:

Kalyan Jewellers India

By looking at the broader picture of Kalyan Jewellers, we can spot that the prices are in a clear uptrend while maintaining higher high, higher low, illustrating positive undertone of the prices.

Around the level of Rs 108 we can spot change in the polarity by the prices which indicates continuation of prior uptrend. The bounce in the prices were preceded by the 50-day EMA (exponential moving average) which again confirms the uptrend.

The momentum indicator RSI (relative strength index) is moving in sync with the prices reflecting the presence of stronger momentum.

We recommend investors and traders to buy this stock for the target of Rs 150 where the stop-loss must be Rs 105 on the closing basis.

Poonawalla Fincorp

Poonawalla Fincorp, have seen a bounce while taking support from the bullish trend line, which the prices respected from April 2021. The stock recently has shown a strong volume participation, suggesting that the demand is pushing the prices higher.

The stock has surpassed the 200-day EMA which confirms the reversal to the upside. Stochastic RSI on the daily timeframe has shown a positive crossover reflecting presence of strong momentum.

We recommend investors and traders to buy this stock for the target of Rs 330, where the stop-loss must be Rs 250 on the closing basis.

Punjab National Bank

PNB is currently nearing its 52-week high which tells that the stock already is in strong momentum. Around the level of Rs 48.50 we can overserve the change in the polarity by the prices, indicating rising bullish sentiment behind the prices.

The stock has shown a bounce to the upside while taking support from the 50 Days EMA which confirms the presence of prior uptrend. RSI on the Daily timeframe have shown a Bullish reversal reflecting rising momentum of the prices.

We recommend investors and traders to buy this stock for the target of Rs 60, where the stop-loss must be Rs 48 on the closing basis.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.