Trade Spotlight: What should investors do with Kotak Bank, InterGlobe Aviation, Tata Elxsi and KSB?

#Bajaj Electricals, #Interglobe Aviation, #Kotak Mahindra Bank, #KSB, #Market Edge, #Nifty, #Sensex, #Stocks Views, #Technicals

While the week ended September 17 was largely positive for market, but the trade on Friday was a roller coaster ride. On Friday morning, benchmark indices and Bank Nifty scaled new highs, but in the afternoon market slipped into the red.

The BSE Sensex hit a new high of 59,737.32 before closing 125.27 points lower at 59,015.89, while the Nifty50 jumped to a fresh high of 17,792.95 before falling 44.30 points to close at 17,585.20 on September 17. Benchmarks climbed over a percent each for the full week.

Stocks that were in focus on Friday included Kotak Mahindra Bank, which was the biggest gainer on the BSE Sensex, rising 5.26 percent to close at Rs 2,006. InterGlobe Aviation gained 11.02 percent to Rs 2,197.40 on the BSE. Tata Elxsi rose 6.50 percent to Rs 5,486.75.

KSB, too, scaled to all-time high of Rs 1,375 before finishing the day trade at Rs 1,237.95, up 3.24 percent.

Here’s what Himanshu Gupta, VP Research at Globe Capital Markets, recommends investors should do with these stocks when the market resumes trading today:

With a very sharp upmove seen over past few weeks, the stock has given a vertical rally from Rs 1,600 odd levels and is very close to its previous all-time highs above Rs 2,000 levels.

The daily chart pattern are suggesting a breakout from a rounding bottom formation which have a potential medium term targets of Rs 2,300 and Rs 2,500, however looking at the recent momentum a throwback in the near term towards the immediate support of Rs 1,900-1,920 cannot be ruled out, which in fact will be a good opportunity for the positional traders to enter.

For long term investors a hold is recommended as even after the sector being in the vicinity of life time highs has grossly been an underperformer compared to the broader markets over past 12-15 months.

The airline stock has finally been able to take a leap in the sky reacting to positive air traffic numbers. The charts of IndiGo had been indicating a positive setup for a while and as soon as the economy opened up the stock witnessed a breakout above Rs 1,850-1,900 zone which had been acting as a supply zone over past many occasions.

We remain extremely positive on IndiGo even after the recent surge in the prices and expect targets of Rs 2,600-2,900 in medium term.

Short term traders can hold their long positions with a trailing stop loss below Rs 2,100 while medium to long term traders can accumulate the stock on declines towards Rs 2,050-2,100 levels.

Tata Elxsi has been one stock that has defied gravity over past few months and has really tested the patience of investors in terms of how much profits one can ignore to book. On a serious note, the stock is a perfect example of how a good stock can make wealth for its shareholders beyond expectations. (With lows of Rs 490 in March 2020 to current price of Rs 5,300+).

Since the long term chart structure of course is not sending any warning signals so for, long term investors who are sitting on huge profits are still advised to keep holding the stock for targets of Rs 6,000 over next 6-9 months, as IT sector is expected to deliver strong performance over next 3-4 quarters.

Levels of Rs 4500-4,200 are likely to act as a strong support zone, in case stocks enters some consolidation in coming months where fresh longs are recommended.

KSB is also one of the stronger performing counters in the recent months, where the long term setup still continues to remain positive and targets of Rs 1,475/1,600 can be expected over medium to long term.

In the short term the stock has given a breakout recently from a pennant formation on daily charts which is in line with the long term positioning of the stock, short term traders can maintain a stop loss below Rs 1,150 and stay invested.

A recent breakout from a continuation pattern in the first week of September above Rs 1,220-1,240 has further added to the momentum of Bajaj Electricals and the stock has hit a new all-time high just shy of Rs 1,600 mark.

Amidst the increase in the volatility at record highs in the broader markets, a technical retracement towards Rs 1,420-1,400 levels is expected before the stock resumes its uptrend once again.

Positional traders are advised to use this dip to enter and maintain a stop loss below Rs 1,300 levels.

Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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