Stocks that were in focus include names like Indus Towers, which fell 8.3%, Vodafone Idea, which declined 19%, and HCL Tech, whose shares dropped 0.8% on Thursday.
Here’s what Kushal Gandhi, Technical Analyst at StoxBox, recommends investors should do with these stocks when the market resumes trading today.
Indus Towers
After experiencing a bullish breakout in early April of this year, the stock surged by 40% to reach an all-time high of 445. However, from June onwards, the stock began its distribution phase, signalling a negative trend.The price action exhibited characteristics of a potential double-top pattern, typically indicating the formation of an intermediate top.
Today’s significant volume-driven movement has confirmed a breakdown, suggesting a likelihood of increased selling pressure. As a result, we advise against purchasing the stock at its current market price.
Vodafone Idea
The current trend of Vodafone Idea is indicative of the initial stage of the stock cycle, commonly referred to as the accumulation phase.
Consequently, the price action exhibits a lack of follow-through momentum. The price action has consistently traded below the 200-day Moving Average and displays indications of suppression after a breakdown from a potential double-top pattern.
It is advisable to refrain from engaging in bottom-fishing the stock and instead await additional technical confirmation.
HCL Tech
The IT index has experienced a significant increase of almost 40% over the past 15 weeks, displaying considerable strength and momentum. We anticipate continuing this trend following a brief pause, during which the index is expected to gather further bullish strength.
Likewise, the share price of HCL Tech has surged by nearly 48% over the same period. However, the relative strength index on the daily timeframe is currently cooling off from the overbought zone and showing divergence compared to the price, indicating a decline in momentum. Consequently, we recommend refraining from making new entries in the stock at the current market price.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
