Trade Spotlight | What should you do with Sharda Cropchem, JK Lakshmi Cement, Finolex Industries on Tuesday?
The market continued to consolidate for yet another session on December 5, but the broader markets had a better day compared to benchmark indices as the Nifty Midcap 50, Midcap 100 and Smallcap 100 indices closed with 0.2-0.4 percent gains.
The BSE Sensex fell 34 points to 62,835, while the Nifty50 managed to hold 18,700 level, closing with 5 points gains at 18,701 and formed Doji kind of pattern on the daily charts, indicating indecisiveness among bulls and bears about future market trend.
India VIX inched by up 2.1 percent to 13.73 levels, from 13.45 levels but still below crucial 15 mark which is supporting the bulls to hold the overall command.
Stocks that performed better than broader markets included Sharda Cropchem and JK Lakshmi Cement which were the biggest gainers in the Nifty500 index.
Sharda Cropchem shares rallied nearly 15 percent to Rs 498, the highest closing level since September 15 this year and formed strong bullish candle on the daily charts with healthy volumes. It has seen a strong breakout of horizontal resistance trend line adjoining September 27, and October 24 this year. Also it has been making higher highs higher lows for third straight session.
JK Lakshmi Cement shares jumped more than 10 percent to end at record closing high of Rs 825.35 and formed robust bullish candle on the daily charts with healthy volumes. It has been making higher highs for 10th consecutive session.
Finolex Industries was also in action, rising nearly 7 percent to Rs 174.35, the highest closing level since February 9, 2022 and forming another long bullish candle on the daily charts with strong volumes. It has seen a breakout of horizontal resistance trend line adjoining April 8 and November 25, 2022.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
JK Lakshmi Cement
By looking at the broader picture of JK Lakshmi Cement, we can observe that the stock is trading at life high which tells that the stock already is in strong momentum.
The stock in the prior trading session has given a breakout from the Rounding Bottom pattern indicating continuation of prior uptrend.Prices have sustained well above 10-week EMA (exponential moving average) which have acted as a strong variable support to the prices.
The prices have sustained well above upper Bollinger band indicating rising volatility for an up move.
RSI (relative strength) on the Daily timeframe have shown breakout too, this reflecting the strong momentum Built-up.
We recommend investors and trader to buy this stock for the target of Rs 1,090, where the stop-loss must be Rs 710 on the closing basis.
Sharda Cropchem
Sharda Cropchem has surpassed its previous resistance level of Rs 484.40 (October 20, 2022), which negates the Lower Low, Lower High formation, Indicating reversal from prior downtrend.
The stock in the latest trading session has given a breakout of rounding bottom pattern which suggest beginning of the trend to the upside.
The breakout is confirmed as it is accompanied by higher volumes.
The stock is sustaining above 50-day EMA which confirms the reversal to the upside from prior downtrend.
RSI on the Daily timeframe is quoting at the highest level since March 2022 which shows that the prices have strong momentum in it.
We recommend traders and investors to buy this stock for the target of Rs 560 where the stop-loss must be Rs 460 on the closing basis.
Finolex IndustriesFinolex Industries has started to get into Higher High, Higher Low formation which points towards the positive undertone of the stock.
Prices in the first week of November 2022 had given a breakout from the Descending Triangle pattern which indicated beginning of the trend to the upside.
The current uptrend is followed by rise in the volumes which shows the long built up behind the prices.
The prices have sustained well above upper Bollinger band pointing rising volatility for an upmove.
RSI on the Daily timeframe have shown a range shift which reflects the rising momentum in the prices.We recommend traders and investors to buy this stock for the target of Rs 210 where the stop-loss must be Rs 157 on the closing basis.
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