Rajesh Bhosale, Technical Analyst at Angel Broking has recommended trading strategies on Rajesh Bhosale on how to trade in Cholamandalam Investment and Finance Company (CHOLAFIN), Divi's Laboratories and Tata Steel. He gave following rationale for technical strategies:
1. Cholamandalam Investment and Finance Company
View-Bearish
Last Close-Rs. 1275.90
''Stock prices since last one month were trading in an 'Ascending Triangle' pattern where both the trend lines of the pattern proved to be a strong support and resistance zone in the past. On the daily chart, prices have broken below the lower range of the pattern confirming a bearish breakdown. In addition, prices have closed below 20DSMA which was acting as strong support for last few sessions. Moreover, momentum oscillator i.e. RSI is showing negative divergence indicating distribution at higher levels. Thus, we recommend selling this stock at current levels for a target of Rs 1205 over the next 5-10 sessions. The stop loss should be fixed at Rs 1313.''
2. Divi's Laboratories
View-Bullish
Last Close-Rs. 1063.35
''The stock is in the uptrend with the higher top higher bottom formation on the daily chart intact. Since last few weeks, stock prices were trading in a narrow range within 1000-1060 level; on the daily chart prices have closed above the higher range confirming a bullish continuation pattern breakout. In addition, prices are well above 20-50-200DSMA indicating overall bullishness in the counter. Going with all the above scenario a strong upside from the current levels cannot be ruled out. Thus, we recommend buying this stock at current levels for a target of Rs 1160 over the next 5-10 sessions. The stop loss should be fixed at Rs 1025.''
3. Tata Steel
View-Bearish
Last Close-Rs. 689.85
''The stock has been an outperformer since last few months; however post marking a recent high at 735 levels prices have marked a lower top lower bottom formation on the daily chart which is first in last several months. As per the Dow Theory, the trend line joining lower tops now acts as resistance zone and currently, prices are trading in the vicinity of this resistance zone forming a bearish candlestick pattern. In addition, prices have closed below 20-50DSMA indicating near-term weakness in the counter. Momentum RSI on the daily chart is heading southwards well below the 30 mark; indicating further weakness in the near term. Thus, we recommend selling this stock at current levels for a target of Rs 640 over the next 5-10 sessions. The stop loss should be fixed at Rs 714.''
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