Trading strategies in stocks that turned ex-bonus, split this week

KIMS, Monarch Networth can potentially rally up to 11% from adjusted stock price; whereas, Bigbloc Construction and Andhra Papers may witness weakness in the near-term; suggests technical charts.

A total of 9 stocks, out of which 5 turned ex-bonus, while the remaining turned ex-split this week. Prominent among these were Bigbloc Construction, Monarch Networth Capital and Franklin Industries, which traded ex-bonus in the ratio of 1:1 respectively.

That apart, Indo Cotspin turned ex-date for 7:10 bonus issue today. The company has offered 7 new equity shares of Rs 10 each for every 10 equity shares held by the shareholders. 

In case of stock split, Andhra Paper and Krishna Institute of Medical Sciences (KIMS) turned 1:2 ex-split; wherein the equity share with face value of Rs 10 each were subdivided into 5 equity shares with a face value of Rs 2 each.

 

Similarly, Sportking India and Onesource Ideas Ventures turned ex-split in the 1:10 ratio; wherein the face value of each equity share of Rs 10 was split into 10 equity shares with a face value of Re 1 each.

In both cases, i.e. ex-bonus and ex-split, the stock price is adjusted accordingly as on the record date. The objective of both the corporate actions includes rewarding shareholders and making stocks more affordable to investors.

In general, stock prices of the relevant companies tend to gain ahead of the corporate action be it bonus or sub-division of equity shares. However, stocks also do re-rate post the ex-date.

As such, here's a technical outlook on select 5 stocks that turned ex-bonus or ex-split this week.

Bigbloc Construction

Current Price: Rs 134

Downside Risk: 20.2%

Support: Rs 133; 128.50; Rs 118

Resistance: Rs 140.70; Rs 149

Bigbloc Construction stock seems placed in neutral zone on the daily scale, with the stock expected to face resistance around Rs 140.70 and Rs 149. On the downside, the stock is seen trading near its crucial 20-WMA (Weekly Moving Average) support, which stands at Rs 133.30.

As long as this support is held, the stock may attempt to test its upside hurdles. However, break and consistent trade below Rs 133, can trigger a fall towards Rs 107 levels; with interim support seen at Rs 128.50 and Rs 118. CLICK HERE FOR THE CHART

Monarch Networth Capital

Current Price: Rs 435

Upside Potential: 11.5%

Support: Rs 415; Rs 390

Resistance: Rs 450; Rs 465

Monarch Networth stock is seen trading close to its adjusted long-term supports at Rs 439 and Rs 420 levels. As long as the stock sustains above these support levels, the stock can attempt to extend the rally. On the upside, the stock can potentially rally to Rs 485 levels; with interim resistance seen at Rs 465 and Rs 450 levels.

On the flip side, in case, the support at Rs 420 is broken, the stock may slip towards its 20-DMA at Rs 415 levels or even test the super trend line support at Rs 390 levels. CLICK HERE FOR THE CHART

Krishna Institute of Medical Sciences (KIMS)

Current Price: Rs 555

Upside Potential: 10.5%

Support: Rs 535; Rs 525; Rs 512

Resistance: Rs 560; Rs 589

KIMS stock has witnessed a strong 59 per cent rally in the last four months from levels of Rs 365 at the end of May to a high of Rs 580 this month. The trend as per the long-term chart is bullish as the stock trades consistently above the higher-end of the weekly and monthly Bollinger Bands.

Chart shows that the bias will remain upbeat as long as the stock holds above Rs 535 - Rs 525 support range; below which key support for the stock is seen at Rs 512. On the upside, the stock can potentially surge to Rs 613 levels; with interim resistance likely at Rs 589 and Rs 560 levels. CLICK HERE FOR THE CHART

Andhra Paper

Current Price: Rs 107

Downside Risk: 29.2%

Support: Rs 99.30; Rs 95.70

Resistance: Rs 112; Rs 117.50

Andhra Paper stock has given a downside breakout on the daily scale with the stock slipping below its super trend line support. Chart suggests, that the near-term bias is likely to remain tepid as long as the stock remains below Rs 122 levels; interim resistance for the stock is seen at Rs 112 and Rs 117.50.

On the downside, the stock has near support at Rs 99.30 - its 20-MMA (Monthly Moving Average) - a key moving average the stock has respected since February 2021. Given the negative divergence on key momentum oscillators the support is likely to be challenged. As such, break and sustained trade below Rs 99.30, can trigger a slide towards Rs 75.80 levels - with interim support expected around 95.70. CLICK HERE FOR THE CHART 

Sportking India 

Current Price: Rs 150

Support: Rs 142; Rs 134

Resistance: Rs 155

The price-to-moving averages action seems favourable for Sportking India stock. However, the stock seems to have entered a phase of consolidation on the weekly scale, indicating immediate support at Rs 142 and resistance at Rs 155 levels. The long-term chart hints that the bias shall remain positive as long as the stock holds above Rs 134.

For now, a breakout from the Rs 142-Rs 155 range shall determine the next trend for the stock. CLICK HERE FOR THE CHART