JM Financial is bearish on stocks such as NTPC, Trent, Indigo and Cochin Shipyard due to being in the overbought zone and advises profit booking while advises entering stocks such as Vodafone Idea and Infosys as they have strong technical setups and are on the verge of breakouts.
Overbought Stocks:
| Stock | Current Monthly RSI | ATH Monthly RSI | ATH Time | % Difference |
|---|---|---|---|---|
| ABB | 91 | 93.7 | Apr-06 | 3% |
| ACE | 85.5 | 90.4 | Feb-18 | 6% |
| ADANIPORTS | 80.64 | 85.7 | Jan-15 | 6% |
| APARINDS | 93.78 | 94.91 | Sep-05 | 1% |
| BAJAJAUTO | 85.94 | 90 | Nov-10 | 5% |
| BDL | 90.28 | 90.28 | Current | 0% |
| BEL | 94.07 | 94.07 | Current | 0% |
| BHARTIARTL | 83.74 | 92 | May-07 | 9% |
| BHEL | 91 | 91 | Current | 0% |
| BLUESTAR | 87.56 | 95.11 | Mar-06 | 8% |
| COCHINSHIP | 93.95 | 93.95 | Current | 0% |
| CUMMINSIND | 90.78 | 90.78 | Current | 0% |
| EXIDEIND | 87.66 | 87.66 | Current | 0% |
| INDIGO | 83.56 | 83.56 | Current | 0% |
| JSL | 91 | 91 | Current | 0% |
| KSB | 90.72 | 92.72 | May-24 | 2% |
| M&M | 86.07 | 89 | Dec-06 | 3% |
| NTPC | 88.6 | 89.38 | Apr-24 | 1% |
| OIL | 92.27 | 92.27 | Current | 0% |
| PHOENIXLTD | 89.82 | 89.82 | Current | 0% |
| POWERGRID | 85.77 | 85.77 | Current | 0% |
| PRESTIGE | 88.77 | 88.77 | Current | 0% |
| SIEMENS | 90.29 | 95.76 | Apr-92 | 6% |
| TORNTPOWER | 87.67 | 88 | May-24 | 0% |
| TRENT | 95.96 | 95.96 | Current | 0% |
| VGUARD | 82.89 | 86.98 | Nov-12 | 5% |
Bearish Views: JM Financial advised caution on scrips such as NTPC, Power Grid, Trent, Cochin Shipyard, Indigo and Bharti Airtel as the stocks are trading near their all-time high relative strength index (RSI).
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Bullish Views: The brokerage is bullish on Vodafone Idea as they see the telecom space remain in pink after the recent price hike. The stock has witnessed a bump in volumes in the last 3 months along with a bullish pole and flag pattern set up, says the research firm. The analysts gave a target of ₹24/28 for the stock.
JM Financials said there is a big reversal opportunity in the IT index and the Infosys is one of the better-placed large-cap ideas. A cyclical move is expected with the possibility of rate cuts from the central banks across the globe, the brokerage said. It added that the stock is looking good for an 18% to 20% upmove from current levels.
Price Action: On Monday, the stocks performed as follows,
Shares of NTPC closed 2.06% down at ₹370.55.
Shares of Trent closed 0.51% up at ₹5,508.
Shares of Indigo closed flat at ₹4,228.
Shares of Cochin Shipyard closed 1.98% up at ₹2,259.
Shares of Vodafone Idea closed 1.34% down at ₹17.65.
Shares of Infosys closed 1.23% at ₹1,586.
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