Buy, Sell or Hold: What should investors do with Trident, Deepak Fertilisers and Infosys?

Indian market closed flat on Friday but with gains of over 2 per cent for the week ended January 14.

Sectorally, buying was seen in capital goods, realty, IT, power, and utilities while selling pressure was seen in telecom, FMCG, and healthcare stocks.

Stocks that were in focus included Trident closed with gains of nearly 5 per cent, Deepak Fertilisers closed with gains of over 6 per cent and Infosys rose over 1 per cent on Friday.
 

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Here's what Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, recommends investors should do with these stocks when the market resumes trading today:

Trident: Buy

The stock hit one more 5% upper circuit on January 14th. From the last four days, the stock hit an upper circuit. The stock has rallied from 52 to 64.80 within a very short period of time.

That rally was price dominating and supported with modest volume activity. On daily and weekly charts, the stock has formed Higher High and Higher Low series patterns which suggest uptrend momentum likely to continue in the near future.

Direction-wise, the structure is still on the positive side but due to the short-term overbought situation profit booking at higher levels is not ruled out.

Short-term traders should remain cautious and very selective as there is a risk to get trapped out at higher levels.

For the trend following traders, 55 or 9-Day SMA would be the sacrosanct support level, above the same uptrend formation is likely to continue till 75-80.

However, below 55 traders may prefer to exit out from trading long positions.

Deepak Fertilizers: Hold

On January 14th, the stock made yet another all-time high of 554. In this month so far, the stock has rallied over 40 per cent, but the important point is that the stock not only surpassed its previous 52-week high of 500 but comfortably managed to sustain above the same which is a positive sign.

The sharp price dominating rally surprised most of the traders. On the daily and weekly charts, the stock has formed breakout continuation pattern which is grossly positive for the Deepak Fertilizers and Petrochemicals Corporation Ltd.  

However, in the short-term time frame, momentum indicators indicate that the stock is in an overbought zone and there are high chances of a quick short-term price correction if the stock trades below 515.

For the next few trading session, 515 would be the trend decider level for the bulls, and if it manages to sustain above the same then we can expect a continuation of uptrend upto 575.

Further uptrend may also continue which could life the stock to 615 on the flip side, dismissal of 515 could possibly trigger quick short-term correction up to 470.

Infosys: Buy

In this week, the stock has rallied over 6 percent on January 14th despite tepid market conditions. It maintained positive momentum and registered a fresh all-time high of 1933 which is broadly positive.    

On the short-term time frame, the stock has formed a promising price volume breakout pattern. The texture of the pattern suggests that the breakout action will continue in the near term if the stock succeeds to trade above 1890 level.

For the swing traders, 1890 could be the trend decider level, and above the same, we could expect the uptrend continuation wave up to 1975-2000.

(Disclaimer: The views/suggestions/advice 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.)