Technical Breakout Stocks: How to trade Tata Motors and Kalpataru Projects which hit fresh 52-week highs

The Indian market snapped a 5-day winning streak to close in the red on Friday as investors preferred to book profits at higher levels.

The S&P BSE Sensex fell more than 170 points while the Nifty50 managed to hold on to 21,700 levels on Friday.

Sectorally, buying was seen in telecom, auto, FMCG, and utilities while selling was visible in oil & gas, energy and public sector stocks.

Stocks that were in focus include names like Tata Motors which rose more than 3% while Kalpataru Projects International Ltd closed with gains of over 7% to hit a fresh 52-week high on Friday.

We have collated a list of three stocks that either hit a fresh 52-week high, or an all-time high or saw a volume or a price breakout.

We spoke to an analyst on how one should look at these stocks the next trading day entirely from an educational point of view:

Analyst: Kunal Kamble, Sr. Technical Analyst at Bonanza Portfolio Ltd

Tata Motor: Buy on Dips

Tata Motors stock recorded a breakout from an Inverse Head and Shoulder pattern on a weekly time frame indicating a bullish trend in the security.

The price has closed near the high forming a bullish candle. Prices are trading above the Fast (50) EMA and Slow (200) EMA indicating a positive trend.

Volume increased during the day which indicates that buyers are active in the stock. On the momentum front, RSI is trading in a higher range which indicates that the trend is bullish.

On the Directional front, DI+ is trading above DI- indicating a positive trend and ADX trading above DI’s indicates strength in the move.

A buy-on-dips strategy can be made in Tata Motors between the range of 645-688 and a stop loss can be maintained at 490 for the upside target of 1070.

Agencies

Kalpataru Projects: Hold

Kalpataru Project stock formed a Rising Wedge pattern. At the lower rising trend line the security has taken strong support and has witnessed strong buying pressure supported by volume indicating buyers’ interest in the security.

A negative divergence is formed between price and RSI, indicating a pause in trend. For an upward move to continue prices need to give a breakout in the northern direction with RSI trading above 75.

Agencies

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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)