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Chart Check: A potential bear trap seen in NBCC; false breakout in Tata Motors

We have collated a list of stocks which remained in focus on Tuesday because of their price action. The technical outlook is for the medium term.

August 28, 2019 / 11:23 AM IST
 
 
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The Indian market witnessed profit booking after rallying for three consecutive days in a row. The S&P BSE Sensex added nearly 150 points while the Nifty50 closed above 11,100 levels on August 27.

Investors’ wealth rose nearly Rs 5 lakh crore in just three trading sessions. Hence, some profit-taking at higher levels was on cards. The volatility will remain high ahead of the August F&O expiry on August 29.

We have collated a list of stocks which remained in focus on  August 27 because of their price action. The technical outlook is for the medium term:

Analyst: Mustafa Nadeem, CEO, Epic Research

BHEL: Remain invested with a target of Rs 60-65 and a stop below Rs 47

BHEL rallied 10 percent on  August 27after it won orders worth Rs 2,500 crore. Global brokerage HSBC upgraded stock to buy.

However, the global brokerage house slashed price target to Rs 60 from Rs 62 per share after lowering earnings estimate by 1-5 percent on lowered order inflow expectations.

The stock is in bearish trend making lower highs and lower tops. On the weekly chart, there is a reversal in RSI from the oversold zone of 30 and a divergence is seen on the daily scale which signals a pullback. A counter-rally can be seen in the short term for an upside to 60-65 with a stop loss placed below Rs 47.

Bata India: Hit a fresh 52-week high! Next target Rs 1,700

The stock breached its all-time highs recently supported by fresh buying and new trading range may be seen. A Flag pattern breakout was seen on the charts which indicates bullish momentum is likely to continue towards a high of Rs 1,700, and a stop loss could be placed at Rs 1,450.

Ashok Leyland: Potential reversal! Remain invested with a target of Rs 77

Auto stocks have been in focus after the stimulus measures introduced by the government last week on Friday.

Ashok Leyland is signalling a potential reversal on the back of positive divergence on the RSI 14.

Also, the stock was able to close above the recent two weeks of consolidation range indicating support at lower levels. We expect Ashok Leyland to move towards Rs 77 with a stop loss of Rs 60.

Tata Motors: It could be a false breakout! A close above Rs 127 could fuel buying

Tata Motors rallied nearly 9 percent on August 27 after a media report indicated that China may be considering to remove or relax restrictions on auto purchases.

The stock is in a bearish trend and the recent upswings have turned out to be false reversals. There is a divergence that is usual in such a bearish trend but given the fact that it has reversed from the oversold zone, we maintain a cautious stance.

Only a close above Rs 127 would call in a further bullish move that can take stock towards Rs 138 - 144. In that case, a stop can be placed at Rs 118.

NBCC: Ignore the rally, it could be a potential bear trap

We have seen a V-shaped pattern in the stock which indicates a trap for bears. Also, a close above its declining resistance line and RSI to supports the price action which indicates the recovery.

The rally could further stretch and may move towards the levels of Rs 46-48 with a very strict stop loss placed below Rs 31.

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

Kshitij Anand
Kshitij Anand is the Editor Markets at Moneycontrol.
first published: Aug 28, 2019 11:23 am

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