Big Movers on D-St: What should investors do with Apollo Tyres, Adani Enterprises and Solar Industries?

Sectorally, buying was seen in auto, realty, oil & gas, consumer discretionary, power, and utilities while some selling was visible in telecom and metal stocks.

Stocks that were in focus include

which was up 6 per cent, which gained over 4 per cent, and which hit a fresh 52-week high and closed with gains of nearly 4 per cent on Tuesday.

Here’s what Jatin Gohil, Technical and Derivative Research Analyst at Securities recommends investors should do with these stocks when the market resumes trading today:


Apollo Tyres: Buy

For the week ended 5th Aug’22, the stock witnessed a breakout from a bullish flag pattern and extended gains. It rose to a 17-month high of Rs 258 subsequently.

The key technical indicators are positively poised on long-term as well as medium-term timeframe charts, while short-term indicators tested the overbought zone.

Overall set-up is bullish, but short-term consolidation or a decline cannot be ruled out before the stock resumes its up move.

Hence, a fresh long position can be initiated at the current juncture and further on dips towards Rs 240 for the desired action. The stock has the potential to move towards Rs 280-300-350 in the medium term.

In case of any decline, the stock will find support around the Rs 220-210 zone, which coincides with its extended upper band of the flag and also, with its key moving averages.

Solar Industries India: Book Profit

On 4th Aug’22, the stock gave a breakout from a narrow range (Rs 2,930-2,620) consolidation and later, with the help of a follow-up move, it recorded a new life-time-high of Rs 3,349.

Since the breakout, the volume remained above average for major trading sessions. We believe that undergoing positive momentum could take the stock towards the Rs 3,450-3,550 zone.

In the past, the stock has witnessed short-term volatility after recording a new high amidst profit booking and later remained sideways for a couple of weeks.

Due to such a sudden rise, the key technical indicators tested the overbought zone on the short-term timeframe chart, and soon, they may reverse.

Hence, it is safe to book profit when the stock moves toward the expected levels (Rs 3,450-3,550). On the lower side, as per the change in polarity principle, the stock will find support around its upper band of the range (Rs 2,930).

Adani Enterprises: Hold

For the quarter ended Dec’20, the stock crossed its long-term supply zone (placed at around Rs 450) and later witnessed a strong rise.

Since then, the stock has explored uncharted territory and rose to Rs 2,986. The stock has witnessed a money multiplier up-move, as it rose by more than 500 per cent from the breakout point.

Historically, the stock remained sideways for at least 3-5 months after witnessing a rise for straight four quarters.

The stock registered a ~36 per cent gain so far in this quarter, which is the fourth in a row. If history repeats itself, undergoing positive momentum may slow down after 5-7 weeks.

Later, the stock may witness a short-term decline due to profit booking. In the meanwhile, the stock will keep exploring uncharted territory, which could take it towards Rs 3,040-3,250-3,350.

The risk-to-reward ratio is not favourable for a fresh long position at this juncture. However, one can hold the existing longs by trailing the stop loss.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)