NTPC, Tata Steel among top picks by Jigar S Patel of Anand Rathi for Aug 1

Apollo Pipes

Apollo Pipes has recently demonstrated a classic technical pattern known as a triple bottom around its historical support level near the Rs 600-mark. A triple bottom is a bullish reversal pattern indicating that the stock has tested the same support level three times, each time rebounding, which suggests a strong demand zone at that price level.

This pattern's formation and the stock's ability to hold above this crucial support level indicate a potential bullish reversal. Currently, Apollo Pipes is trading around 630, showing signs of stability above this support area. Moreover, on the daily chart, RSI has made impulsive structure (V-Shape) near 30 zone which further strengthens the positive outlook.
 

 

Given these technical indicators, we recommend taking a long position in Apollo Pipes in the price range of Rs 640-635. The target for this trade is set at Rs 720, anticipating a significant upward movement, while the stop-loss should be placed around Rs 590 on a daily closing basis.

NTPC
 

Over the past six weeks, NTPC has been consolidating within the price range of Rs 390-355, showing limited movement outside this zone. However, the stock recently experienced a breakout on the weekly chart, indicating a potential upward trend. This breakout has positioned NTPC's price well above the previous consolidation range. On the technical indicators front, the Relative Strength Index (RSI) on the weekly chart has moved into the overbought zone, surpassing the 70 mark. This suggests a strong bullish momentum, as the RSI typically reflects increasing buying pressure when it crosses this threshold. Consequently, we recommend entering a long position in the stock during any pullback within the price range of Rs 405-410. The target for this trade is set at 440, with a stop-loss at Rs 390 based on a daily close.

Tata Steel 
 

Recently, Tata Steel experienced a significant decline, dropping nearly 22 points after forming a double top at the Rs 180 level. This decline equates to a 12 per cent fall, reflecting considerable selling pressure. However, the stock found support around its 100-day Exponential Moving Average (DEMA), indicating a potential stabilisation point. On the indicator front, the Daily Relative Strength Index (RSI) has formed an impulsive structure near the 30 oversold zone, which appears attractive at current levels. Therefore, we advise buying Tata Steel in the 162-165 zone, with a target of Rs 180 and a stop-loss of Rs 155 on a daily close basis.

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