Stock picks of the day for August 31, 2018
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Sun Pharma: LTP: Rs 639.50| Buy around 635 - 630| Target: Rs 690-725| Stop Loss: Rs 600| Return 13%
After confirming its breakout from the double bottom pattern on the weekly chart, Sun Pharma rallied to 645.50.
Subsequently, it saw mild pullback but stock found support near 617 and rebound sharply in Thursday’s trade.
The daily RSI (14) found support above 60 levels whereas the weekly RSI (14) had already signaled a range shift.
Considering the above evidence, we advocate traders to accumulate this stock in a range of Rs 635 to 630 with a price target of Rs 690 and in case of further optimism, stock can even rally till Rs 725. A stop loss should be placed below Rs 600.
PTC India Financial Services (PFS): LTP: Rs 19| Buy at Rs 18.80-19.00| Target: Rs 24| Stop Loss: Rs 17| Return 26%
PFS has been in a strong down trend since the past several months and hit a fresh 52-weeks low of around 14.50. Subsequently, it saw decent recovery and rallied towards 19.20.
Once again, the stock resumed its downward trend but didn’t go below the swing low of 14.50 and made a higher bottom. Looking at the overall structure, we are seeing a formation of inverse head & shoulder pattern.
During Thursday’s session, stock penetrated the neckline of said pattern. The daily RSI (14) signaled a bullish range shift. Hence, we recommend traders to buy this stock at the current level of 18.80 with a price target of 24. Stop loss should be placed below 17.
Tata Elxsi Ltd: LTP: Rs 1407| Sell below Rs 1388| Target: Rs 1320 - 1275| Stop Loss: Rs 1440| Return 9%
The stock has been in a protracted uptrend since several months and hit a fresh all-time high of 1491. Subsequently, stock corrected towards 1375 and
rebound sharply, however, stock failed to cross its previous swing high and made a lower bottom on a daily chart.
Looking at the overall structure, we are seeing a formation of head & shoulder pattern on daily chart. The said pattern will be activated if stock breaches the 1388 levels.
In that case, we may see a sharp slide towards 1320 and stock may even correct till 1275. Stop loss should be placed at 1440.