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Buy and sell ideas for May 7 from Anand Rathi: Jubilant FoodWorks, HDFC AMC

Over the past 28 trading sessions, HDFC AMC has maintained a range between approximately Rs 3,600 and Rs 3,800

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Jubilant FoodWorks

Jigar S Patel Mumbai

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Jubilant FoodWorks 
Jubilant FoodWorks has two key technical analysis signals: a bull divergence on the daily Moving Average Convergence Divergence (MACD) indicator and a violation of a bearish trend line that had been in place for 3-4 months.

A bull divergence occurs when the stock price forms lower lows while the MACD indicator forms higher lows, indicating a potential reversal from a downtrend to an uptrend.

The breach of the bearish trend line suggests a potential shift in the stock's direction from bearish to bullish. Based on these signals, we advise investors / traders to "go long" in Jubilant FoodWorks within the price range of Rs 470-475 per share.

Additionally, upside target of Rs 526 per share, indicating the potential profit opportunity. To manage risk, a stop-loss is advised to be placed near Rs 445 per share, on a daily closing basis.

Over the past 28 trading sessions, HDFC AMC has maintained a range between approximately Rs 3,600 and Rs 3,800.

Recently, it broke out convincingly from this range, presenting an attractive opportunity. Additionally, it breached the Bear trendline and closed above the upper Bollinger Band, reinforcing the bullish sentiment.

Notably, the Daily Stochastics indicator consistently avoided entering the oversold zone prior to the breakout, indicating sustained buying interest within the lower levels of the consolidation range.

Consequently, we advise initiating long positions on HDFC AMC within the range of Rs 3,850-3,900, targeting an upside of Rs 4,275, with a stop-loss set around Rs 3,675 based on daily closing prices.  

Fluorochem, as of now, has encountered substantial support at the middle Bollinger band, indicating a potential stabilisation in its price movement.

Additionally, the daily stochastics, a momentum indicator, have shown resilience by not dipping into the oversold territory and consistently maintaining levels above 20. This observation suggests a promising opportunity for investors to consider buying into the stock.

The recommended buying range lies between Rs 3,600 - 3,650, providing a favourable entry point. With an optimistic outlook, the target price for the upside is set at Rs 3,850. To manage risk, a stop-loss strategy is advised, with the stop-loss order to be placed near Rs 3,510.

Disclaimer: Jigar S Patel is a senior manager of equity research at Anand Rathi. Views expressed are his own. 

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First Published: May 07 2024 | 6:34 AM IST

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