Cipla, Bandhan Bank, Dr Reddy's Labs: Trading strategies for these buzzing stocks

Domestic stock indices extended gains for the second straight session on Wednesday. Weakness in banking and financials weighed, as gains were largely capped. The BSE Sensex rose 92.47 points, or 0.14 per cent, to end at 66,023.24. The NSE Nifty advanced 28.45 points, or 0.14 per cent, to end the day at 19,811.85.

A few stocks namely Cipla Ltd, Dr Reddy's Laboratories Ltd and Bandhan Bank Ltd are likely to remain under the spotlight today. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities has to say on these stocks ahead of Thursday's trading session:

Cipla | Buy | Target Price: Rs 1,370 | Stop Loss: Rs 1,220
Cipla is trading at a 52-week high, which implies that the stock already is in a strong momentum. A recent breakout from a falling trend line pattern along with the formation of bullish Belt Hold candlestick patterns above 20- and 50-DMAs on the daily chart confirm the trend continuation. The opening of Bollinger bands on the daily timeframe suggests a rising volatility in support of an upward move. Going ahead, one can expect prices to move higher till the level of Rs 1,370, where a stop loss must be placed at Rs 1,220 on a closing basis.

Dr Reddy's Laboratories | Buy | Target Price: Rs 6,160 | Stop Loss: Rs 5,389
Dr Reddy's Labs is now showing signs of a revival after undergoing shallow correction from August to October where prices declined from a high of Rs 5,990 to a low of Rs 5,205. A falling channel breakout with the formation of higher tops and higher bottoms are the indication of a trend reversal. Beside this, momentum indicators like stochastic have given positive crossover, which also suggest a pullback move. Observation of the above factors suggest that a bullish move in Dr Reddy's is possible for a target up to Rs 6,160. One can initiate a buy trade in the range of Rs 5,630-5,650 with stop loss of Rs 5,380 on a daily closing basis.

Bandhan Bank | Sell | Target Price: Rs 189 | Stop Loss: Rs 225
Bandhan Bank has demonstrated a bearish sentiment as it gave breakdown from its rising trendline on the daily chart. It is currently trading below all its key moving averages (20, 50, 100 and 200-day SMA) accompanied by persistently lower daily RSI relative to its reference line. A formation of lower high-lows on the daily chart signals a continuation of weakness, emphasising a bearish outlook. Recoveries should be utilised for selling opportunities.


Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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