Big Movers on D-St: What should investors do with Biocon, Sterling & Wilson and UTI AMC?

Sectorally, buying was seen in consumer durables, banks, energy, capital goods, and power stocks while selling was visible in IT, FMCG, and realty stocks.

Stocks that were in focus include names like Biocon which hit a fresh 52-week low, Sterling and Wilson Renewable Energy which rose more than 6%, and UTI Asset Management Company which closed with gains of over 5% on Tuesday.

Here’s what Priyank Upadhyay, VP – Research, SSJ Finance & Securities recommends investors should do with these stocks when the market resumes trading today:

Biocon: Bounce back
Prices have been in a strong downtrend since February 2022 when it was trading around 400 and now the stock price is trading below 200.

Prices are trading below 20- and 40-week averages which is placed at 243 and 269. So, the trend is weak as of now. In the last one-month, volumes have spiked, indicating a selling climax. Any reversal from here could be positive for the stock in the short to medium term.

The Relative Strength Index (RSI) is in the oversold zone with a reading of 20.86 which is the lowest in the last 15 years. Hence, there is a high probability that prices could see a bounce back.

Prices are testing the 2017-2018 breakout level placed at Rs 195, so a bullish polarity is at work.

Thus, from the above analysis, it looks like prices are in an oversold zone and a retest of the breakout level placed at 195 is possible. If it happens, we can expect a bounce back towards Rs 240-260 in the short to medium term.

Sterling and Wilson: Accumulate
Prices formed a low in March 2020 around 70 and then saw a rally towards 500 in October 2021. And since it has corrected by more than 50%. The recent swing low was made in December 2022 and was at around 260 and now it is trading near 320 levels.

The stock price has also broken the falling trendline stretched from October 2021 at 295 which is a positive sign. Prices are trading above the 20- and 40-week average at 297 and 300, indicating trend and momentum are on the higher side.

The Relative Strength Index (RSI) is also trading above the 60 mark which is a bullish sign. Volumes are on the rise suggesting that this rally has legs to move up in the short to medium term.

Thus, favoured view for the stock is bullish as long as 290-260 supports hold. We expect prices to rally towards 400-450 in the medium term. We advise traders to accumulate the stocks from a medium-term perspective.

UTI AMC: Buy
Prices formed a top of around 1200 in September 2021 close to when the Nifty peaked in October 2021. Since then, prices corrected towards 600 and then it gave a rally towards 900 in August 2022.

Prices corrected towards 650 in October 2022 and again rallied towards 900 in December 2022. We are now again back at 650 zones and the prices are now consolidating between the 600 and 900 range since June 2022 till date.

Prices are again hovering near the support zone around 650 and this week’s volume is the highest compared to the last 12 weeks which is a positive sign.

RSI is at 42 and turning up from the near oversold zones. Prices are currently below 20- and 40-week avg at 715 and 743.

Thus, current prices are trading near the lower support band around 650. From here, we expect a rally toward 900 again in the short to medium term.

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