Indian benchmark indices managed to settled with mild cuts on Monday, following a volatile trading session. BSE Sensex shed 73.48 points or 0.09 per cent, to end the session at 81,151.27. NSE's Nifty50 dropped 72.95 points, or 0.29 per cent, to close at 24,781.10 for the day.
Some buzzing result-bound stocks including Adani Green Energy Ltd, Zomato Ltd and One 97 Communications Ltd are likely to remain under the spotlight of traders for the session today. Here is what Jigar S Patel, Senior Manager - Technical Research at Anand Rathi Shares and Stock Brokers has to say on these stocks ahead of Tuesday's trading session:
Adani Green Energy | Avoid
In recent months, Adani Green has encountered resistance in the Rs 2,100-2,200 range and is currently positioned near the Rs 1,700 level. Despite already experiencing a 20 per cent correction, the stock shows signs of weakness as indicated by its weekly Relative Strength Index (RSI) falling below the critical 50 mark. This suggests a bearish sentiment, and there is potential for the stock to further decline, till 1600 in the coming weeks. Given the current technical setup, it is advised to avoid initiating fresh long positions at this time.
Zomato | Book Profits
Over the past 16-18 months, Zomato has surged by an impressive 570 per cent after hitting a low of Rs 44.35 in January 2023 and is now trading around the Rs 265 level. On the daily chart, a head and shoulders pattern has emerged, with the price action breaking below the neckline, signalling potential weakness. A closer look at the volume reveals that the highest trading volume occurred during the formation of the left shoulder, followed by a gradual decline, and volume during the right shoulder is now below average, a concerning indicator. Given these signals, it is recommended to book profits on any upward bounce towards the Rs 275-280 range and avoid entering fresh long positions at this time.
One97 Communications | Avoid
Over the past five months, Paytm has seen a strong rally, surging by 150 per cent after hitting a low of Rs 310 in May 2024 and is currently trading near the Rs 725 level. However, despite this significant uptrend, there are signs of potential weakness on the technical front. On the daily chart, both the Relative Strength Index (RSI) and Average Directional Index (ADX) have shown bearish divergence, which is a cause for concern. Bearish divergence occurs when the price continues to rise, but momentum indicators like RSI and ADX fail to confirm the strength of the trend, indicating that the upward momentum may be weakening. Additionally, Paytm faces key resistance levels at Rs 775 and Rs 800, which could act as hurdles to the ongoing rally. Given these factors, it is advisable to book profits on any upward bounce toward the Rs 775-800 range, as the stock could face selling pressure at these levels. Entering fresh long positions should be avoided at this point, as the risk of a pullback increases.