Stock picks of the day for September 07, 2018
Tata Motors Ltd: Buy around Rs 270| LTP: Rs 269| Target: Rs 305| Stop Loss: Rs 254| Return 14%
Looking at the daily chart, the stock has formed a strong base near 250 levels and is trading in a narrow range. As a result, it has formed an inverse head & shoulder pattern on the daily chart.
The said pattern will be activated if Tata Motors starts sustaining above 275. The daily Bollinger band has contracted significantly and indicates the period of low volatility.
Considering the above technical evidence, we recommend traders to buy this stock at the current level of 270 with a price target of 305. A Stop loss should be placed at 254 on a closing basis.
Dr Reddy's Laboratories Ltd: Buy around Rs 2580 - 2530| LTP: Rs 2567| Target: Rs 2760| Stop Loss: Rs 2460| Return 7%
On the weekly chart, Dr. Reddy’s has formed a ‘Descending Triangle’ pattern and off late stock breached the upper band of the triangle pattern. The break out of the said pattern was supported by the weekly RSI (14) which entered well inside the 60 levels.
The weekly 9-45 EMA on price has signaled positive crossover which supports our hypothesis. Hence, we advocate traders to buy Dr. Reddy in a range of Rs 2,580 to Rs 2,530 with an upside price target of Rs 2,760. A stop loss should be placed at Rs 2,460.
Jubilant FoodWorks Ltd: Sell Around 1435 - 1450| LTP: Rs 1417| Target: Rs 1330| Stop Loss: Rs 1495| Time frame 15 to 21 trading session| Return 6%
Jubilant FoodWorks has been in a strong uptrend since several months and in that optimism, the stock hit a record high of 1578. Subsequently, it saw profit booking and stock slide below 1400.
Due to the sharp profit booking, the stock broke the upward sloping pattern drawn on the daily chart. Subsequently, stock saw pullback during Thursday’s trading session but the up move got resist near 1450 – 1460 which was a breakdown point of channel pattern.
On the weekly chart, we are seeing complex bearish divergence. Combining the above technical parameters we recommend traders to build a short position in a range of Rs 1435 to Rs 1450 with a price target of Rs 1330. A stop loss should be placed at Rs 1495.