Bulls on song
The stock of ITC has outperformed the market so far in 2022. Even last week, ITC rallied supported by good volume even as the broader market declined. There are no signs of a bearish reversal yet. We forecast the stock to continue its bull run in the coming months as well. Nevertheless, there could intermediate corrections.
Key supports are spotted at ₹320 and at ₹300. So, we suggest buying the stock in three tranches. Buy one-third of the intended quantity now at ₹346 and for another one-third when there is a dip to ₹320. Go long for the remaining at ₹300. Thus, the average buy price would be nearly ₹322. Keep the stop-loss at ₹270 initially. Alter it to ₹340 when price rises above ₹380. Tighten it further to ₹420 on a rally above ₹450. Exit all your longs when the scrip touches ₹495.
KPIT Technologies (₹660.95)
The corrective phase in the stock of KPIT Technologies seems to have come to an end as it has rallied past a key hurdle last week. Even if the broader market comes under downward pressure, this stock looks to have been positioned itself to retest ₹800, based on the chart. Substantiating the bullish view are the RSI and the MACD indicators, which look positive on the weekly chart. Moreover, the breakout of ₹600 has occurred with significant volume.
These factors make this scrip a good candidate for longs, at least for the short term. Since there is a possibility for the scrip to dip to the ₹600-610 price region before moving past ₹700, one can buy now and accumulate at ₹610. Place initial stop-loss at ₹540. Move it up to ₹670 when the stock touches ₹720. Liquidate the longs at ₹795.
Aditya Birla Capital (₹111.85)
Rejected by barrier
The bears seem to be defending the resistance band of ₹120-124 well as the stock of Aditya Birla Capital continues to struggle in breaching it. A bearish pin bar candlestick on the weekly chart and a morning star pattern on the daily chart are signs of worry, as they indicate bearish reversal. Along with this, the decline last week is giving the sellers an upper hand.
Therefore, we expect the stock to depreciate and will most likely fall to the support band of ₹88-90 before the end of this year. We recommend going short at the current level of ₹112. Add more shorts if there is a rally to ₹118. Stop-loss can be kept at ₹128 initially. Revise it down to ₹110 when the price slips below the psychological ₹100-mark. Book profits at ₹90.