Breakout Stocks: How GMM Pfaudler, Kalyan Jewellers, and Indian Overseas Bank are looking on charts for Monday

NEW DELHI: Nifty lost nearly half a per cent to close in the red zone for the third consecutive week as FIIs chose to take some profits off the table. PSU banks, pharma and IT stocks gained while realty and banking stocks struggled.

We have collated a list of three stocks that either hit a fresh 52-week high or saw a volume or a price breakout on Friday.

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

Analyst: Ashish Kyal, CMT, Founder – Waves Strategy Advisors, SEBI Registered Research Analyst

GMM Pfaudler

On the daily timeframe, GMM PFAUDLER was trading in a downward-sloping parallel channel. After gaining almost 10%, prices have given a breakout of the channel. We have shown the ADX indicator, which gives an indication if the stock is trending or in a trading range. The ADX of this stock is 39.43, indicating that the stock continues to trade with good momentum.

Bollinger Bands have started expanding. Overall signs suggest that the trend of the stock remains on the upside. One can use buy-on dips towards the channel as a buying opportunity for the targets of 1,670 with a stop loss of 1,450 levels.

Kalyan Jewellers

Kalyan Jewellers, showed a sharp rise and closed with a huge gain of 11.52%. On the daily timeframe, Kalyan Jewellers, which has already given a breakout of the upward-tilted channel, has perfectly retested the channel support and bounced back on the upside. As per bar technique, as prices have not given close below the previous day’s low, which is a positive sign for the stock. Along with this, increased volume acted as a double confirmation. Also, in this uptrend, every time base line (red) has continued to act as near-term support. As per this, the nearest support can be placed at 181 levels.

Let’s take a look at the relative strength index (RSI). The levels of the RSI are showing 79.77, which is near the overbought zone. We need RSI to cool down for further upward movement to continue. For now, one can use buy on dips strategy to ride the trend with the target of 215.

IOB

In the previous trading session, IOB closed with a massive gain of 13.36%. CARE Ratings has assigned a fresh rating of CARE A1 + to the bank’s proposed certificate of deposits. The sudden rise was news-driven. On technical grounds, MACD has shown a positive crossover. Prices have given a breakout of consolidation.

For now, the overall trend is likely to remain bullish. Also, moving average crossover is also suggesting that buy on dips approach to ride the trend for a better risk reward. We can expect a move towards 32-33. While on the downside, 28 levels can act as near-term support.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)