Buy, Sell or Hold: What should investors do with Power Finance, NTPC & Coal India?

Indian market recouped losses on Tuesday but benchmark indices failed to close above crucial psychological levels. The S&P BSE Sensex failed to hold on to 60,000 while the Nifty50 closed below 17,800 levels tracking weak global cues.

The weakness may well continue on Wednesday and experts advise investors to keep track of important support levels placed at 17500-17600 levels.

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Sectorally, buying was seen in the public sector, utilities, power, oil & gas, and energy space while selling pressure was visible in realty, telecom, IT, and auto.

Stocks that were in focus include Power Finance that rose over 5 per cent, NTPC was up nearly 4 percent, and Coal India closed with gains of over 4 percent. All stocks hit a fresh 52-week high on Tuesday.

Here's what Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, recommends investors should do with these stocks when the market resumes trading today:

Coal India: Avoid creating fresh long                 

This counter seems to be in a bear market rally as it failed to recoup even bare minimum retracement level of 23.6% from the year 2015 highs of 447 to October 2020 low of 109 levels.

However, on weekly charts, it seems to have registered a sustainable breakout last week with a close above 165. Hence, sustaining above 165 levels a higher target of 190 can be expected.

As bear market rallies remain vulnerable for sudden reversals, we advise traders not to create fresh longs, but if someone is holding then they should maintain a stop below 168 on a closing basis and look for 190 kinds of targets.

NTPC: Create fresh long with a stop below 127

This counter seems to have resumed its up move after a brief pause on much higher volumes. However, at Tuesday’s intraday high of 133 levels, it tested the downsloping trendline on the weekly charts which is in progress from the October 2017 highs of 157.

Hence, to continue this upward momentum, it needs to initially clear the hurdle of 134. In that scenario, a higher target of 147 can be expected.

Nevertheless, considering the recent large price appreciations of a single day on the back of massive volumes dips can be considered as an opportunity to add into this counter. Positional traders can initiate fresh longs with a stop below 127 on closing basis and look for a target of 147.   

Power Finance: larger trend seems to be sideways

Though the larger trend seems to be sideways, on the short-term charts, it seems to have registered a breakout with a close above 138.

Hence, going forward it needs to sustain above 138 to retain positive bias. In the last session, it witnessed a decent price appreciation on the back of massive volumes.

The momentum could take the index towards 157 levels. Hence, positional traders can initiate fresh longs with a stop below 135 and look for a target of Rs 157.

(Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)