Bajaj Auto, Asian Paint, Cipla: Trading Strategies for these buzzing largecap stocks

Indian benchmark indices kicked off the week on a positive note and managed to settle higher. Optimism over the budget, strong FIIs flows, strong IT earnings and rally in the PSU banking stocks supported the buoyant sentiments at Dalal Street. BSE Sensex jumped 145.52 points, or 0.18 per cent to end at 80,664.86. The Nifty50 index gained 84.55 points, or 0.35 per cent, to settle at 24,586.70 for the day.

Some buzzing largecap stocks namely Asian Paints Ltd, Bajaj Auto Ltd, Cipla Ltd are likely to remain under the spotlight of traders for the session today. Here is what Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers has to say on these stocks ahead of Tuesday's trading session:

Asian Paints | Buy | Target Price: Rs 3,150 | Stop Loss: Rs 2,855

Asian Paints has successfully surpassed its critical resistance level of Rs 2,940 and is now holding steady around the Rs 2,950 mark. This breakout, characterized by substantial trading volume, is a promising indicator of the stock's potential upward movement. From a technical analysis standpoint, the Daily MACD has formed a bullish crossover just above the zero line, indicating a positive trend, suggesting renewed strength, and making the current price levels especially appealing for investors. Based on these factors, it is advisable to consider purchasing shares within the Rs 2,950-2,960 range, targeting an upside potential of 3150. To manage risk prudently, a stop-loss should be implemented near the 2855 level on a daily closing basis.

Bajaj Auto | Buy | Target Price: Rs 10,000 | Stop Loss: Rs 9,488

Bajaj Auto has been consolidating within a price range of Rs 9,365-9,666 in the recent weeks. However, the stock has recently exhibited a decisive breakout, accompanied by substantial trading volume, indicating a potentially attractive buying opportunity at this juncture. From a technical analysis perspective, the Daily RSI has reversed from 50 levels, further signalling a positive outlook for the stock. Based on these indicators, it is advisable to consider adding long positions within the Rs 9,650-9,675 range, targeting an upside potential of Rs 10,000. To manage risk, a stop-loss should be set at Rs 9,488 on a daily closing basis.

Cipla | Book Profits

Cipla has been trading within a narrow price range of Rs 1,485-1,535 in recent weeks, indicating a period of consolidation where the stock's price has been relatively stable and moving sideways. However, during the previous trading session, Cipla's price briefly tested the upper limit of this range at Rs 1,535 but failed to sustain this level and close above it, signalling potential resistance at this point. Additionally, a concerning technical indicator has emerged on the daily chart: a shooting star candlestick pattern at the top. This pattern typically suggests a potential reversal or a weakening of the current upward trend, adding to the bearish sentiment. Given these signals, it is advisable for those already holding long positions in Cipla to consider booking profits within the Rs 1,500-1.525 range. On the other hand, a fresh buying opportunity should only be considered if the stock manages to close above Rs 1,535 daily basis. In such a scenario, the target price would be set at Rs 1,600, with a stop-loss placed at Rs 1,499 on a daily close basis to manage risk effectively.

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