Top swing trading ideas you should not miss.

Top swing trading ideas you should not miss.
by 5paisa Research Team 06/10/2021

Best Swing Trading ideas based on price and volume percentage surge. Just Dial, Radico Khaitan and Symphony.  

Price and volume are two of the most prominent inputs used by traders across the world while swing trading. When used in isolation, they reveal very little but when used in conjunction, they help us to sort the wheat from the chaff. So, this swing trading system is based on the deadly combination of price and volume percentage surge, which helps us to discover high probability swing-trading candidates.

So, here is the list of stocks that fulfil the criteria of volume and price surge and as a result, they flash in our swing-trading system:

  1. Just Dial: The stock gained 2.77% on Wednesday, as a result, it not only outperformed the frontline gauge but also the broader markets. The stock’s daily range was thrice its 10-day average range. In addition to this, the volume for the day was greater than its previous trading session and in fact, were the highest since September 03. As a result, the stock met the norms of the swing trading system. In the near term, the stock has the potential to touch levels of Rs 1050, while on the downside the support is seen around levels of Rs 985.

  1. Radico Khaitan: The stock jumped 5% on Wednesday. The stocks' daily range on Wednesday was almost twice its 10-day average range. Additionally, the volume for the day was greater than its previous trading session and was higher than the 10 and 20-day average volume. With price and volume criteria met, this stock looks ripe for a good up-move in the coming days, hence, swing traders can keep this on the radar for up-move towards the four-digit mark, while immediate support is seen around Rs 925.   

  1. Symphony: The stock had gained nearly 2.5% on Wednesday. Interestingly, the stock has met the criteria of volume and price surge on Wednesday. The stock has witnessed a breakout of six-days consolidation pattern along with a huge spike in the volumes. The volumes were higher than its previous trading session and it was higher than 10 and 30-days average volume. In addition to this, the daily range of the stock was greater than its 10-days average range. As a result, the stock has met the criteria of our trading system, Swing traders should not miss this stock as it can touch levels of Rs 1130 in the near term followed by Rs 1165 in the medium term. On the downside, support is seen around Rs 1055 levels.

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Zee says open to rival offers as founder Chandra questions Invesco’s intent

by 5paisa Research Team 06/10/2021

Could the bitter battle between Zee Entertainment Enterprises Ltd and some of its minority shareholders get any worse? Well, if the latest news reports are any indication, it possibly could. 

A Bloomberg report says that Zee would be open to rival offers even though it thinks that the planned merger with the Indian unit of Sony Corp is the best deal on the table. 

“This is the best deal for shareholders at this point in time as we are interested in maximization of values for all our stakeholders including shareholders, the company and consuming public," Zee chairman R. Gopalan said in a Bloomberg Television interview, adding that the company is open to “consider if there is another deal on the table”. 

What have Zee’s minority investors done to thwart the merger with Sony?

US asset manager Invesco, through its funds Invesco Developing Markets Fund and OFI China Global LLC, has called for a meeting of the company’s shareholders. After Zee refused to hold the meeting, the two shareholders approached the Bombay High Court, where the entertainment company, in turn, filed a suit, asking that the notice for a meeting be declared illegal. 

So, do Gopalan’s latest comments indicate Zee is climbing down?

That may appear to be the case, at least prima facie. But in fact, Zee is unlikely to back away from the deal with Sony, as the debt-laden company is not likely to find any other suitor of a comparable size, at least in the foreseeable future. 

Moreover, Zee Group founder Subhash Chandra has questioned the minority shareholders on their stand. “No matter who runs Zee but the company, to which I’ve and many of my friends have given their blood and sweat for the past 30 years, should be in the hands of someone under whose leadership the organisation should prosper and shareholders should be benefitted since I don’t have any profit or loss associated with this,” Chandra has said.  

Chandra also raised doubts over Invesco’s intentions. “Invesco is a good investor but in this case they are not revealing that what they will do after taking Zee, and in whose hands management will go?”

“You want to remove Punit Goenka? Okay, fine but what next? Have you done any deal with someone? The six directors given by them - what's their background? Do they have any relation with any particular company that wants to take over? Hence, Invesco should come out transparently and openly, and let the shareholders decide - whether they want to take the deal of Invesco or want to go with Sony's deal,” he said. 

What really are the demands by the minority shareholders?

The Invesco funds want the ouster of Zee board members including chief executive officer Punit Goenka, who is leading the talks with Sony. About 53% of the merged entity would be owned by Sony and the rest by Zee’s holders, according to the non-binding agreement signed last month.

What are the contours of the deal?

As part of the deal, unanimously agreed to, in principle, by the Zee board, Sony Pictures Networks India will effectively hold a 52.93% stake in the merged entity, while the remaining 47.07% will remain with Zee shareholders. 

Why is Sony the majority owner here?

This is because SPN India, Sony’s India entertainment arm, is investing an additional $1.5 billion, or Rs 11,615 crore, to capitalise the merged entity. This money will allow the new entity to grow its business further. Had Sony not infused more cash, Zee shareholders would have held a 61.25% stake. 

The merged entity will effectively own the biggest suite of entertainment content services in India, bypassing Disney India and Star India. It will also be bigger than Viacom 18, the joint venture of billionaire Mukesh Ambani’s Network 18 Group and US-based ViacomCBS.

Interestingly, Sony and Viacom18 were engaged in merger discussions but scrapped the talks last year as the Ambani-led group reportedly wanted a majority stake in the combined entity.

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Small-cap stocks: Keep a close eye on these trending stocks for October 7, 2021.

Small-cap stocks: Keep a close eye on these trending stocks for October 7, 2021.
by 5paisa Research Team 06/10/2021

The following small-cap stocks have made fresh 52-week high today – Fairchem Organics, Golden Tobacco, Genesys International, Cineline India, ABM International and JITF Infralogistics.

Frontline benchmark indices Nifty 50 and Sensex shrunk by more than 0.90% each on October 6, 2021. Nifty Bank also corrected by 0.58% i.e. 219.45 points to close the session at 37,521.5. BSE Mid-cap index plunged by 1.22% and underperformed broader markets. BSE Small-cap index relatively outperformed by losing 0.55%.

Keep a close eye on these trending small-cap stocks on Thursday.

Raymond – The company’s subsidiary Raymond Realty has recently announced the development of ‘Grade A’ commercial and high street retail space at Thane land spread across 9.5 acre. The company also announced its plans to build premium residential units comprising of 3 and 4 BHK configurations spread across 1 million square feet subject to requisite approvals. The project is expected to come with premium amenities with some being the first of their kind in the sector in India.

With the ongoing construction at a breakneck speed and completion of its first three towers tower structure in a record time, the organization is committed to delivering its first unit ahead of 24 months of the RERA deadlines. As per a filing with the exchange, “In an environment that is marred by delayed delivery of Real Estate projects, this commitment by Raymond Realty for its home buyers will be a first of kind benchmark in the industry in line with the brand ethos of trust, quality and excellence of Raymond.” 

In addition to housing and commercial projects in Thane, Raymond Realty is also evaluating numerous options through joint development agreements without land acquisition in the Mumbai Metropolitan Region.  

MTAR Technologies – CRISIL Ratings has upgraded its ratings on bank facilities of the company to 'CRISIL A-/Stable/CRISIL A2+' from the earlier 'CRISIL BBB+/Positive/CRISIL A2.’ Ratings continue to reflect the healthy business risk profile of the company marked by a strong order book, long-standing relationship with customers, strong export diversity and healthy operating profitability.

As per the filing with the exchange, “The ratings also benefit due robust financial profile bolstered by recent IPO with healthy accruals and debt protection metrics. These strengths are partially offset by large working capital requirement, customer concentration risk and susceptibility to risks inherent in a tender based business.” 

52-week High Stocks - The following small-cap stocks have made fresh 52-week high today – Fairchem Organics, Golden Tobacco, Genesys International, Cineline India, ABM International and JITF Infralogistics. Keep a close eye on these counters on Thursday, October 7, 2021.


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Moody’s ups outlook for banks, companies but retains negative view on this PSU

by 5paisa Research Team 06/10/2021

In some welcome news for India Inc, global ratings firm Moody’s has upped the rating outlook for nine Indian banks and nearly two dozen companies from “negative” to “stable”.

The banks that have been given an upgrade are Axis Bank, Bank of Baroda, Canara Bank, HDFC Bank, ICICI Bank, Punjab National Bank, Export-Import Bank of India, State Bank of India (SBI) and Union Bank of India.

Apart from banks, Moody’s also changed its outlook to stable for several non-bank lenders. These include Housing and Urban Development Corp, Indian Railway Finance Corporation, Indian Renewable Energy Developement Agency Ltd, Power Finance Corporation, REC Ltd and Hero FinCorp Ltd.

Other companies whose outlook has been changed include Tata Consultancy Services, Infosys Ltd, Reliance Industries Ltd, ONGC Ltd, Petronet LNG Ltd, Ultratech Cement, Oil India Ltd, Indian Oil and Hindustan Petroleum Corp Ltd.

Apart from these, at least 10 infrastructure majors have also seen an upgrade in their outlook. These include NTPC Ltd, National Highways Authority of India, Power Grid Corp of India Ltd, Gail (India) Ltd, Azure Power and several Adani group companies including Adani Green Energy, Adani Transmission, Adani Ports and Special Economic Zones, Adani Electricity Mumbai and Adani International Container Terminal. 

What prompted Moody’s to take such a step?

The upgrade follows the agency upping the country’s sovereign credit rating outlook on Tuesday from “negative” to “stable”. 

“The decision to change the outlook to stable reflects Moody's view that the downside risks from negative feedback between the real economy and financial system are receding,” the ratings firm said. 

Simply put, Moody’s thinks that an economic recovery is on the cards, and that India could be coming out of the shackles of successive lockdowns that had seen the country register its worst macroeconomic numbers and a full-blown recession for the first time in four decades. 

Has Moody’s changed India's actual rating?

No, it hasn’t. It has kept India’s sovereign rating at Baa3. This is the lowest investment grade and is just one notch above junk.

While Moody’s hasn’t changed the rating itself, the fact that it revised the outlook to stable means the risk of India’s rating falling to junk has receded. The government, meanwhile, has been pushing rating firms to upgrade India’s sovereign rating.

Are there any companies whose outlook remains negative?

Yes, there is at least one. Moody’s says its outlook on state-run Bharat Petroleum Corporation Ltd remains negative. This decision reflects “the uncertainty around its ownership, capital structure, liquidity and management control given the ongoing process by the government to divest its entire stake in the company”.

The government has selected the state-run refiner for privatisation and aims to sell the company to a private-sector buyer in the current financial year. The sale, in fact, could lead to a downgrade in BPCL’s rating.

“Given the negative outlook, a rating upgrade is unlikely. A change in outlook to stable will require the conclusion of the sale of government stake in the company such that the support incorporated in BPCL's rating is maintained,” Moody’s said.

“On the other hand, the rating will be downgraded if the government sells its entire stake resulting in elimination of the support incorporated in the rating. A sale of government’s entire stake in BPCL to a buyer with weak credit quality or significant credit negative changes to BPCL's post-acquisition capital structure or financial profile could also put downward pressure on the rating,” Moody’s added.

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Multibagger alert: Rs 1 lakh invested in this chemical stock would have given you Rs 24 lakh in five years.

Multibagger alert: Rs 1 lakh invested in this chemical stock would have given you Rs 24 lakh in five years.
by 5paisa Research Team 06/10/2021

Long-term investors have made a huge profit by investing in Deepak Nitrate as it has surged by 2,304% in the last five years.

The stock of multibagger Deepak Nitrate rallied from Rs 808 to Rs 2,886 and gained 192% since the beginning of this year. The stock has risen 260% in the past year.

Long-term investors have made a huge profit by investing in this chemical stock as it has surged 2,304% in the last five years which is 24x times the invested amount. Rs 1 lakh invested in 2016 would have become Rs 24 lakh in 2021.

Deepak Nitrite is one of the leading suppliers of chemical intermediates. It has a diversified portfolio of the intermediate, which is used in dyes and pigments, agrochemical, petrochemical, pharmaceutical, plastics, textiles, paper and home and personal care segments in India and overseas.

In the last five years from FY16 to FY21, revenue has grown at a CAGR of 20% and profit has grown at a CAGR of 55% which shows the steep growth of the company.

There is a tremendous increase in operating profit margin from 10% in FY16 to 27% in FY21, due to proper backward integration and forward integration. In doing so, they saved a lot of cost from raw materials which is used for manufacturing.

Global companies are trying to reduce dependency on China since various factories in that country can’t operate due to power shortages. This is a positive macroeconomic factor for chemical companies operating in India.

Deepak Nitrate has a market leadership across product segments, they are the leading producer of sodium nitrite in the world and one of the top three global players in fine and speciality chemicals.

The company has strong management with Deepak Mehta, the chairman of the company who has 40 years of industry experience and his son Maulik Mehta as the CEO, who has 10 years of industry experience and exceptional academic background.

Though stock had a massive rally in the past, do you still think the company can utilize the present situation and gain momentum?.

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Chart Busters: Top trading set-ups to watch out for Thursday.

Chart Busters: Top trading set-ups to watch out for Thursday.
by 5paisa Research Team 07/10/2021

The Nifty index has formed a bearish engulfing candlestick pattern on the daily chart. The index has lost nearly 240 points from the days high. The broader market has also witnessed a downward move. The advance-decline ratio was in the favour of decliners. Despite this selective stocks have seen buying interest by market participants.

Here are the top trading set-ups to watch out for Thursday. 

Bosch: Since the last 96 weeks, the stock was oscillating in a broader range of Rs 17260-Rs 7850, which resulted in the formation of a symmetrical triangle pattern on the weekly chart. On Wednesday, the stock has given a breakout of a symmetrical triangle pattern. Further, this breakout was supported by a robust volume of more than 11 times of 50-days average volume, indicating strong buying interest by market participants. The 50-days average volume was 56232 while today the stock has registered a total volume of 645475. Currently, the stock is trading above its short and long-term moving averages. The stock's Relative Strength Index (RSI) has reached its highest value in the last 14-weeks, which is bullish. Also, it has managed to close above its prior swing high after almost 16 weeks. The stock is in uptrend and trend strength is extremely high. The Average Directional Index (ADX), which shows trend strength, is as high as 48.91 on a daily chart and 27.57 on a weekly chart. Generally above 25 levels is considered as the strong trend. In both time frames, the stock is meeting the criteria. Hence, we would advise the traders to be with a bullish bias. Going ahead, as per the measure rule of the symmetrical triangle pattern, the first resistance for the stock is placed around Rs 19600, followed by Rs 22260. On the downside, supports are seen around Rs 15870-Rs 15500 levels as it is a confluence of 8-day EMA and today’s low.

Chembond Chemicals: Considering the weekly chart (on logarithmic scale), the stock is oscillating in the rising channel for the last 57 weeks. The stock has formed a strong base near the demand line of the rising channel. The demand line coincides with the 20-week EMA level. On Wednesday, the stock has given a 30-days consolidation breakout on the daily chart and it has marked a fresh all time high. The breakout was confirmed by robust volume. All the major indicators suggest a bullish momentum in the stock. Currently, the stock is displaying a bullish trend as it is trading above its short and long-term moving averages. The weekly RSI (66.38) is just above the bullish zone and surged above the prior swing high. The MACD is above the zero line and signal line on the daily chart. The daily MACD histogram suggests bullish momentum. Going ahead, the level of Rs 245 would act as an important support for the stock in the near-term as per the rule of change in polarity i.e. previous resistance once breached acts as a support level. On the upside, targets are open towards the levels of Rs 300. As long as the stock stays above the level of Rs 245 mark, be with a bullish bias.