Stock picks of the day for November 30, 2018

Dr Reddy’s Laboratories Ltd: Buy around 2650 – 2625| LTP: Rs 2652| Target: Rs 2900| Stop Loss: Rs 2520| Return 9% 

After confirming its breakout from broad “Descending Triangle’ pattern, the stock consolidated in a range and formed a triangle pattern on the daily chart.

During the last week, the stock confirmed its breakout from symmetrical triangle pattern, however, the follow-up buying was missing, as a result, it saw minor pullback during the current week.

On Thursday, the stock resumed its up move and eventually ended at highest point post-July 27, 2017. The daily RSI (14) entered inside the 60 level which supports our hypothesis.

Hence, we believe that the impact of Descending Triangle pattern will be seen in the coming weeks; therefore, we recommend traders to buy this stock in the range of 2650 to 2625 with a price target of 2900 and a stop loss placed below 2520.

Berger Paints: Buy above 324| LTP: Rs 319| Target: Rs 350| Stop Loss: Rs 310| Return 10%

Berger Paints has an inverse relationship with Crude Oil which has corrected sharply in the past few weeks. The impact of such development was seen during the recent past in the counter.

Off late, the stock has consolidated in a range and the daily chart resembles a formation of ‘Bullish Pennant’. The breakout of the said pattern will be seen if the stock starts trading above 324.

In that case, the stock can retest its recent high of 350. On the lower side, the level of Rs 310 will be a good support and below that our long view will be negated and traders should exit from their long positions.

Century Textiles Ltd: Sell below Rs 889| LTP: Rs 894| Target: Rs 840 – 810| Stop Loss: Rs 927| Return 9.4%

Looking at the daily chart, the stock has seen a sharp rally from the bottom of around 718 and rallied till 927. Subsequently, the bullish momentum exhausted and we are seeing a formation of Head & Shoulder pattern on the hourly chart.

The said pattern will be activated if stock breaches and sustains below 889. In that case, the stock is likely to correct till 840 – 810 levels respectively.

The weekly Lower Top and Lower Bottom formation is intact which indicates that the trend is still down. Hence, we advocate traders to go short below 889 with a price target of 840 & 810 levels respectively. Stop loss should be placed above 927.