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Business News/ Markets / Stock Markets/  Stocks to buy or sell: Tata Power, Coal India and Power Grid — these three shares dip post-breakout. Should you buy?
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Stocks to buy or sell: Tata Power, Coal India and Power Grid — these three shares dip post-breakout. Should you buy?

Stocks to buy today: Three energy stocks gave a decisive breakout on Friday — Tata Power, Coal India, and Power Grid Corporation of India

Buy or sell stocks: The recent volatility in the Indian stock market, with the India VIX surging to 13 percent, has created potential bottom fishing opportunity in these three breakout stocks, say experts. (Photo: Pixabay)Premium
Buy or sell stocks: The recent volatility in the Indian stock market, with the India VIX surging to 13 percent, has created potential bottom fishing opportunity in these three breakout stocks, say experts. (Photo: Pixabay)

Stocks to buy or sell: Three energy stocks showed a decisive breakout in the technical chart pattern despite sharp selling last Friday. Those three breakout stocks are Tata Power, Power Grid Corporation of India, and Coal India Ltd. Generally, a breakout stock jumps after giving a decisive breakout on the chart pattern, and the market was expecting some upside on these three energy shares. However, to the surprise of stock market observers and investors, all three breakout stocks today plunged, putting a dent in investors' hopes. However, fundamentals experts believe that a quality stock will always remain quality. The fall in these shares can be attributed to the high volatility in the Indian stock market today. They said that PSU stocks have come under colossal sell-off pressure, and two of these breakout stocks are PSU stocks; hence, a fall in these shares should be seen from the high volatility and sell-off in the PSU segment. They battered in favour of these three breakout stocks and advised medium-term investors to look at them if they are looking for any bottom fishing opportunities.

Breakout stocks today

Explaining the Nifty 50 and Bank Nifty chart after the Friday sessions, Aditya Gaggar, Director of Progressive Shares, said, "Both the timeframes i,e, Weekly (DOJI) and Daily (Bearish Engulfing) indicate a trend reversal in the Index with a negative divergence in the RSI. We believe the Index is likely to oscillate in the range of 22,160- 22,770. With a Shooting Star candlestick pattern, Bank Nifty reversed from the higher end of the rising channel, suggesting a correction. The Auto and Metal counters are moving on expected lines, boosting our confidence to remain bullish on the same. From the Energy segment, Coal India- Inverted Head & Shoulder Breakout, PowerGrid- Symmetrical Triangle Breakout, Tata Power-Flag, and Pole Breakout."

Breakout stocks to buy today

Following the fall in all three breakout stocks, Avinash Gorakshkar, Head of Research at Profitmart Securities, reassured investors, "All three breakout stocks are quality. From a fundamental perspective, Tata Power and Coal India Ltd are quality stocks, and one can consider adding them to their stock portfolio. The recent volatility in the Indian stock market, with the India VIX surging to 13 percent, has created potential bottom fishing opportunities. For those looking to capitalize on this, Coal India shares could be a good bet in the PSU segment, while Tata Power shares are looking promising in the power and energy segment."

Tata Power share price target

On the outlook for the Tata Power shares, Ganesh Dongre, Senior Manager — Technical Research at Anand Rathi, said, “Tata Power shares have a strong base at 420 apiece whereas it is facing resistance at 420 per share. Those with this energy stock in the portfolio are advised to hold the scrip, maintaining a stop loss at 420. The stock is facing resistance at 465. Once it breaches this hurdle, it may go up to 485 to 490 apiece level."

Clear guidance for Tata Power shares: Ganesh Dongre of Anand Rathi advises fresh investors to consider buying Tata Power shares at the current level, with a short-term target of 485. However, he cautions that a strict stop loss at 420 should be maintained for any fresh position. This clear target price and stop loss level provide investors with a clear strategy for their investment.

Coal India share price target

Advising Coal India shareholders to hold the scrip, Ganesh Dongre said, “Coal India shareholders are advised to maintain stop loss at 430 apiece level. The stock faces resistance at 485 to 490 per share level. Once it breaches this hurdle on a closing basis, we can expect the energy PSU stock to touch 520 to 525 per share level in the short term."

On the suggestion of the fresh investors, Ganesh Dongre said, "Fresh investors can buy the stock at CMP while maintaining stop loss at 400 per share level. One can maintain the buy-on-dips strategy until Coal India shares are above 400. On decisively breaching the 490 hurdle, we can expect the Coal India share price to touch the 8520 to 525 per share mark."

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, and not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.

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ABOUT THE AUTHOR
Asit Manohar
Chief Content Producer at Live Mint Digital Team
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Published: 06 May 2024, 12:17 PM IST
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