IndusInd Bank, M&M, Bank of India: What should be your trading strategy? 

 

Domestic benchmark indices extended gains on Wednesday, thanks to positive global cues and buying in select index heavyweights. BSE Sensex rose 390 points, or 0.64 per cent, to settle at 61,045.74. Nifty50 jumped 112 points, or 0.62 per cent, to close at 18,165.35. 

Select stocks such as IndusInd Bank, Mahindra & Mahindra and Bank of India were on traders’ radar. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities suggests traders to do with these stocks in Thursday's session: 

IndusInd Bank | Buy | Target Price: 1,410 | Stop Loss: Rs 1,110

In last few months, the IndusInd Bank stock is consolidating within a broad trading range Rs 1,275-1,115 levels, indicating strong consolidation. The stock has recaptured 20-, 50- and 100-day SMAs and is sustaining above the same. The stock is running in the Ascending Triangle pattern on the weekly chart. On the downside, the stock has a support of rising trend line, which is coming from the lows of Rs 763. Daily MACD and RSI are also looking positive, which implies strength. Traders should buy, hold and accumulate this stock around the levels of Rs 1,220-1,210 with an expected upside of Rs 1,410 with downside support of Rs 1,110. 

Bank of India | Exit | Resistance: Rs 101-103 | Support: Rs 81-75

The Bank of India stock has seen a massive correction of over 10 per cent in the past couple of days. A formation of Double Top on the daily chart suggests a pause in the rally of the stock. The stock is hovering below its 20- day SMA and is looking weak on the daily and weekly charts. Momentum indicators like RSI and stochastic have shown bearish crossovers that confirms the inherent weakness in the scrip. On sustaining below Rs 87 at 50-DMA, the scrip can extend this weakness towards Rs 81 and Rs 75 levels. The upside is looking capped till Bank of India stock holds below the Rs 101 level. 

Mahindra & Mahindra | Buy | Target Price: 1,420 | Stop Loss: Rs 1,270

After a promising falling trendline breakout, the stock is consistently trading above the bullish crossover of 20- and 50-day SMAs, which is broadly positive. In addition to this, it has maintained higher trough and higher crest formation on weekly scale. Last week, the stock successfully closed above 20-week SMA while forming a Bullish Belt Hold candlestick pattern on the weekly scale, with incremental volume activity, indicating further uptrend from the current levels.

At this juncture, the trend is very strong and the price action indicates that the possibility of the breakout is very high. One may look to buy M&M at Rs 1,310-1,320 levels and wait for the upside target of Rs 1,420 with stop-loss of Rs 1,270 levels on closing basis.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Business Today)

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