Big Movers on D-St: What should investors do with Cipla, Asian Paints and SPARC?

The Indian market closed in the red for the seventh consecutive day on Thursday. The S&P BSE Sensex pared morning gains and closed with losses of nearly 200 points, while the Nifty50 managed to hold on to 16,800 levels.

Sectorally, selling was seen in utilities, power, IT, banks, and auto stocks, while buying was seen in metals, healthcare and FMCG stocks.

Stocks that were in focus included names like Cipla, which was up nearly 2 per cent, Asian Paints, which fell more than 5 per cent, and Sun Pharma Advanced Research Company, which rallied by more than 15 per cent on Thursday.

Here's what Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities, recommends investors should do with these stocks when the market resumes trading today:

SPARC: Buy
After a sharp correction, the stock took support near Rs 200 and bounced back sharply. On Thursday, despite tepid market conditions, the stock rallied over 13 per cent.

A promising price-volume rally and long bullish candle on the daily charts indicate a continuation of the uptrend in the near future.

For the bulls now, the 50-Day SMA (Simple Moving Average) or Rs 225 would be the important level to watch.

If the stock manages to trade above the same, we can expect a fresh uptrend rally towards Rs 240-245. On the flip side, if the stock starts trading below Rs 210, we could see further weakness up to Rs 200-197.

Asian Paints: Sell
On Thursday, the stock corrected nearly 5 per cent. After a short-term uptrend rally, it witnessed profit booking at higher levels. It formed a Double Top formation on the daily charts and a long bearish trend reversal candle, indicating a strong possibility of a further correction from the current levels.

Technically, 50-Day SMA (Simple Moving Average) or Rs 3,365 would act as a key support zone, and if it closes below the same, then we could expect further correction to Rs 3,300-3,250.

On the flip side, a minor pullback rally is possible. If the stock succeeds to trade above Rs 3,450, then it could move towards Rs 3,530-3,550.

Cipla: Buy
On Thursday, the stock hit a fresh all-time high of Rs 1,121.65. In the short-term time frame, the stock formed a strong price-volume breakout continuation pattern. The texture of the pattern suggests that the breakout action will continue in the near term if the stock succeeds to trade above Rs 1,080 or the 10-Day SMA (Simple Moving Average) level.

For the swing traders, Rs 1,080 would be the sacrosanct level, and trading above the same, we can expect an uptrend continuation wave up to Rs 1,150-1,175. On the flip side, below 1080 uptrend would be vulnerable.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)