Sectorally, buying was seen in infra, realty, public sector, and oil & gas stocks while selling was seen in healthcare and FMCG space.
Stocks that were in focus include names like Graphite India which rallied more than 8%, PFC rose more than 12% and REC closed with gains of over 10% to a new high on Friday.
We have collated a list of three stocks that either hit a fresh 52-week high, or all-time high or saw a volume or a price breakout.
We spoke to an analyst on how one should look at these stocks the next trading day entirely from an educational point of view:
Analyst: Kumar Saurabh, Director at Technofunda Ventures Private Limited
Graphite India:
Graphite India is a highly cyclic company. In the last downcycle, prices fell from Rs 900 to Rs 250 and again the price is on the rise. This is reflected by the relative strength of the company against the Nifty50, where the company is showing relative strength after 1.5 years of underperformance.
However, trading is all about risk management. When we look at the current prices with respect to potential support and resistance, we observe that the risk-to-reward ratio to trade is not in favor.
However, given the stock is outperforming NIFTY after a long time, it is worth keeping on radar to enter when the risk-to-reward is favorable for trade.
One needs to wait for prices to be observed around Rs 579 level and if crossed, could be used as potential support.
However, this is only one of the possible futuristic scenarios which may or may not play out. Technical analysis is all about being good at reactive scenarios than being great at predictive scenarios.
Still, this approach does provide views on how to approach such situations and possible trades.
PFC and REC:
PFC and REC both are government-owned companies engaged in financing of power sector projects. Given the current tailwinds around finance, infrastructure, power, green energy, etc., these two companies are appropriately positioned around the tailwinds.
This is reflected in the similarity of charts in terms of multi-year breakout and further journey on weekly charts.
Successful trading is all about successful risk management. On the weekly charts, the stock looks quite extended.
However, on the daily charts, one can observe that on Friday both the stocks crossed immediate short-term resistance (PFC around Rs 277 and REC around Rs 247).
One should try to buy near these levels within a 5% range from these levels so that if the trade does not work, the maximum possible loss remains 5% but if it works, one gets to ride the journey successfully.
Analyst Disclaimer:
SEBI Registration number: INH000012272
Financial Interest
Analyst: No
Analyst’s Relative: No
Analyst’s Associate/Firm: No
Financial Interest above 1% or more
Analyst: No
Analyst’s Relative: No
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)