Buy, Sell or Hold- What should investors do with MGL, Can Fin Homes and Mangalore Refinery?

The domestic equity market ended with nearly a one per cent loss on Friday. Benchmarks Nifty50 and the Sensex declined 0.83% and 0.8% amid heavy pressure in auto, energy, bank and media stocks. In the highly volatile week ended April 29, which saw indices closing in the red thrice and settling in positive territory twice, Nifty50 dropped 0.4% and Sensex saw a minor cut of 0.2%. A major trigger for this week remains LIC IPO, which opens on May 4, in a holiday-shortened week.  

Meanwhile, Nifty mid cap and small cap indices dropped 0.8% and 1.1% respectively on Friday as all sectoral indices sat in the red.  

The correction in the market on the last trading session of the week came despite Foreign institutional investors turned net buyers after their continuous selling spree for the past many days, as they bought shares worth Rs 743.22 crore on Thursday, according to stock exchange data.  

"Investors should focus on quality stocks in this market. dips were encouraging investors to accumulate quality stocks with focus on defensives & domestic growth sectors like manufacturing & capital goods," said Vinod Nair, Head of Research at Geojit Financial Services.  

He was of the view that a shrink in the US economy and rate hike expectations in the upcoming Fed meet triggered sell-off in the global market. "Domestic market reduced exposure ahead of the shortened next week and opening of India’s largest IPO," he said. 

Meanwhile, certain stocks came in focus on Friday too. These stocks were Mahanagar Gas, Can Fin Homes and Mangalore Refinery & Petrochemicals. Mahanagar Gas closed with nearly 7% cuts, Can Fin Homes dropped more than 6% and MRPL rose about 7% on Friday.  

Here is what Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities Ltd, recommend investors should do with these stocks when market resumes trading on Monday. 

MGL: 

Last Friday, the stock corrected over 6 percent. From last couple of weeks, it has been consistently taking resistance near 850 level. a sharp correction formation indicating further downside from the current levels. In addition, after a long time, it succeeded in closing below 20-day SMA which is broadly negative. For the traders, 820 or 20-day SMA would be the immediate resistance levels. Below which, the correction wave is likely to continue till 750-740. On the flip side, above 820, the chances of hitting 860-880 would turn bright. 

Can Fin Homes: 

On Friday, the stock corrected sharply. On daily and weekly charts, it has formed long bearish candle which is largely negative. On daily and intraday charts, the stock consistently holding lower top series formation.  Further, after a long time, the stock broke the important support level of 50 days and 200-day SMA. In the near future, 200-day SMA or 610 would be the trend decider levels, below the same correction wave will continue till 575-565. On the flip side, fresh pullback rally possible only after 610 breakouts. Above which, it could rally up to 630-640. 

MRPL: 

In this month so far, it rallied over 80 percent, post short term correction, the stock successfully clears the 200-day SMA level and within a short period of time, it rallied from 45 to 75. On daily and weekly charts stock is holding breakout continuation formation which is largely positive for the MRPL Ltd.  We are of the view that, the broader formation of stock is still in to the positive side, but due to temporary overbought condition, we could see the profit booking at higher levels. for the bulls, 75 and 85 would be the immediate resistance level. On the flip side, 65 could be the short-term support level. Below which, the strong possibility of quick short-term correction till 62-60 is not ruled out.