Analyst: Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy
Canara Bank – Horizontal Resistance Breakout
Canara Bank has been in an uptrend for the past one and a half years to hit a high of 455. From there, the stock corrected about 10 percent but on Wednesday, the stock gave a fresh breakout of this level with very good volumes.
The daily RSI of the stock is 69 indicating strength in the stock. The weekly RSI is 73 which shows that the stock still has good upside potential.
Option Chain analysis also shows bullishness as huge put writing and call buying was seen. Writing on the put side is seen even at strike prices above the ATM level.
Thus, it is advised to buy Canara Bank for a target of 498. The stop loss will be at 439 on a daily closing basis.Cipla – Narrow Range Breakout
Cipla had been trading in a narrow range of 1160 to 1270 for about five months but on Wednesday the stock broke out of this range with good volumes.
The daily RSI for the stock is 69 and a cross-over of the 50 and 100 DMAs is also seen, indicating the conviction of the buyers. The stock has given a firm closing above 1300.
Option chain analysis also indicates bullishness in the stock as calls have been bought and puts have been written aggressively.
If the level of 1300 is sustained then Cipla can be bought for a target of 1430. The stop loss will be placed at 1239.
Crompton- Cup and Handle Pattern Breakout
Crompton had been on a downtrend for a long time but recently the stock has shown bullishness. 320 was a strong resistance for the stock which it broke on Wednesday, however, failed to close above it. The daily RSI is at 71 depicting strength in the stock. The stock has formed a cup and handle pattern and if the stock manages to sustain above 320, further rally can be seen.
On the derivative front, buying was seen on the call side, and writing was seen on the put side indicating an expectation of upside movement in the stock. Thus, Crompton can be bought for a target of 350. The stop loss will be at 298 on a closing basis.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
