Muthoot Capital Services (₹387.9)
Set to resume uptrend
The stock of Muthoot Capital Services, which confirmed a cup-and-saucer chart pattern by breaching the neck level of ₹340 towards the end of May, could not go all the way to the target of ₹520. It had seen a decline recently after facing a hurdle at ₹420. However, the overall uptrend remains valid and the price drop that happened recently is only a corrective decline.
Moreover, the price fall has turned the risk-reward favourable for fresh longs. So, buy the stock now at ₹388 and accumulate if the price dips to ₹360. Keep a stop-loss at ₹325 initially and revise it to ₹395 when the stock rises above ₹420. Tighten the stop-loss further to ₹430 when Muthoot Capital Services’ stock reaches ₹450. Exit at ₹475, a strong resistance.
Polycab India (₹4,999.2)
Bull flag breakout
Polycab India’s stock broke out of the ₹4,500-4,800 range three weeks ago and confirmed a bull flag pattern. This is an indication that the price could shoot up to ₹6,000 quickly. So, even though the stock had softened over the past couple of weeks, the uptrend is intact.
Thus, we suggest buying the shares of Polycab India now at around ₹5,000 and accumulate if the price moderates further to ₹4,870. Place initial stop-loss at ₹4,700; shift it to ₹4,950 when the stock touches ₹5,200. Move the stop-loss further higher to ₹5,300 when the price hits ₹5,500. After this, when Polycab India’s share appreciates to ₹5,800, exit half of the holdings and alter the stop-loss to ₹5,600 for the other half. Book profits on the remaining at ₹5,950.
Varun Beverages (₹875.4)
Likely to rebound
Varun Beverages’ stock confirmed a triangle pattern a couple of weeks ago and hinted at the continuation of the bull trend. It then surpassed a barrier at ₹860 last week, which is now a support. These factors have increased the odds for further appreciation in price. From the current level of ₹875, the stock could decline a bit more, possibly to ₹850, and then see a rebound.
The stock shows potential for a rally to ₹1,000. Hence, we recommend going long now at ₹875 and buy more shares if the price drops to ₹850. Place initial stop-loss at ₹815. When the stock of Varun Beverages moves above ₹920, trail the stop-loss to ₹890. Shift the stop-loss further up to ₹920 when the price touches ₹950. Liquidate all the longs at ₹985.