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Indian Hotels Company
Indian Hotels Company has two key technical analysis signals: a bull divergence on the hourly stochastics indicator and a violation of a bearish trend line that had been in place for some time on hourly stochastics indicator.
A bull divergence occurs when the stock price forms lower lows while the stochastics 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.
Additionally, there is a bullish butterfly pattern seen on hourly scale so based on these signals, we advise investors / traders to "go long" in Indian Hotels Company within the price range of Rs 545-555 per share. Additionally, upside target of Rs 585 per share, indicating the potential profit opportunity. To manage risk, a stop-loss is advised to be placed near Rs 532 per share, on a daily closing basis.
Power Grid
In the current market scenario, a significant event is unfolding within Power Grid. Analysis of its daily chart reveals the emergence of a bullish piercing candlestick pattern, a crucial signal indicating potential upward momentum.
This pattern's occurrence aligns precisely with daily middle Bollinger band. This confluence of factors serves to bolster positive sentiment surrounding PowerGrid, suggesting a favourable outlook for the stock.
Furthermore, examining the indicator dynamics, it is observed that the hourly stochastic oscillator has ventured into the overbought territory. This condition typically implies an underlying bullish bias within the stock's movement.
Consequently, market participants may consider initiating long positions within the price range of Rs 304-308, with a target set at Rs 325. It's prudent to manage risk by placing a stop-loss order near Rs 296 on daily close basis.
Federal Bank
After peaking near the Rs 170 mark on May 2, 2024, Federal Bank experienced a significant downturn, with a decline of approximately 13 points, equating to roughly 7-8 per cent.
However, in the subsequent two trading sessions, Federal Bank demonstrated resilience by avoiding further drops and instead consolidating within a narrow range of Rs 156-160. Notably, in the prior trading session, there was notable buying activity observed at lower price levels, particularly from the middle Bollinger band, suggesting investor interest in purchasing the stock at these levels.
From a technical perspective, the hourly stochastics indicator has reversed from the Rs 60 levels, indicating a potential shift in momentum, and presenting an attractive buying opportunity.
Consequently, traders are advised to consider buying Federal Bank within the range of Rs 159-162, with an anticipated upside target of Rs 171. To mitigate risk, a stop loss order is recommended to be placed near Rs 155 on a daily close basis, thereby limiting potential losses in the event of adverse price movements.
(Jigar S Patel is a senior manager of equity research at Anand Rathi. Views expressed are his own)
