Delta Corp (₹202.85)
Trading at range bottom
The stock of Delta Corp, which witnessed a sharp fall between April and June last year, declined from nearly ₹340 to ₹170. Nevertheless, it took support at ₹170 and bounced back. But looking at the price action since August, the stock seems to be charting a sideways trend. It has largely been fluctuating between ₹185 and ₹230.
Two weeks ago, the stock posted a weekly gain and formed a morning star chart pattern. Although the stock remained flat last week, the pattern remains valid and hints at an imminent rally, possibly towards the range top at ₹230. So, one can buy this stock now at about ₹203 and buy more if price dips to ₹195. Place stop-loss at ₹180. Alter the stop-loss to ₹202 when stock moves above ₹215. Liquidate the longs at ₹230.
Escorts Kubota (₹2,090.3)
At a supply zone
The stock of Escorts Kubota has been on a downtrend since December last year. However, it rebounded from the low around ₹1,915 made earlier this month. Currently hovering around ₹2,090, the stock is at a supply zone. The price band of ₹2,120-2,160 is a strong barrier where a falling trendline coincides. We expect the bears to capitalise on this resistance zone and pull the price down in the coming weeks.
Therefore, one can consider going short on the stock of Escorts at the current level of ₹2,090. Add more shorts if the price goes up to ₹2,130. Place stop-loss at ₹2,200 at first. Revise it down to ₹2,100 when the price slips below ₹2,020. Thereafter, when the stock falls to ₹1,980, bring the stop-loss lower to ₹2,030. Exit all the shorts at ₹1,940.
Forms rounding bottom
The stock of Mphasis is reversing the downtrend which has been in place since April last year. The price action since August shows that it has been forming a rounding bottom. By closing above the neckline at ₹2,170 last week, the scrip has confirmed the pattern. This significantly increases the probability of a rally from here. While there is a minor hurdle at ₹2,430, we anticipate the stock appreciating to ₹2,650 within six months from now.
But there might be a corrective decline to ₹2,125. So, traders can buy the stock at the current level of ₹2,236. Buy more shares when price dips to ₹2,125. Place initial stop-loss at ₹1,980. On a rally past ₹2,430, modify the stop-loss to ₹2,350. Tighten the stop-loss further to ₹2,430 when price touches ₹2,500. Book profits at ₹2,650.