Allcargo, PVR Inox among top 3 stock picks by Anand Rathi on July 02

Allcargo Logistics 

On a daily scale, Allcargo has formed a bullish alternate bat pattern following a sharp decline of 14 points, which translated into a substantial 19 per cent reduction in its price. This significant drop has been closely monitored, and for the past 3-4 trading sessions, Allcargo has successfully held its support level within the Rs 59-60 range, demonstrating resilience and stability above this crucial level.

This sustained support indicates that there is strong buying interest at these prices, preventing further declines. Additionally, the Relative Strength Index (RSI), a momentum oscillator used to measure the speed and change of price movements, has developed a complex W shape structure on the daily chart. This formation is often interpreted as a bullish reversal signal, suggesting that the stock is poised for an upward move.

Based on this technical analysis, it is advisable to initiate a long position in the stock within the Rs 61- 62.5 range, aiming for an upside target of Rs 68. To manage risk effectively, a stop-loss should be set at Rs 58 on a daily closing basis, ensuring that potential losses are minimised if the stock does not perform as expected.

PVR Inox
 

PVR Inox has recently exhibited two significant technical analysis signals that indicate a potential bullish shift. Firstly, there is a bullish divergence on the weekly Relative Strength Index (RSI) near the 30 level. This divergence suggests that while the stock's price was declining, the RSI was starting to increase, indicating a possible reversal in momentum. Secondly, the stock has broken through a bearish trend line of RSI weekly that had been in place for approximately 7 months.

This trend line breach is a critical signal, suggesting that the long-term bearish trend may be reversing to a bullish trend. Based on these technical indicators, investors and traders are advised to "go long" on PVR Inox, purchasing shares within the price range of Rs 1,475-1,500. 

The stock is projected to have an upside target of Rs 1,650 per share, highlighting a significant profit potential. To mitigate risk, it is recommended to place a stop-loss near Rs 1,405 per share on a daily closing basis, ensuring protection against potential adverse movements.

Balaji Amines
 

Balaji Amines has recently exhibited two significant technical analysis signals that indicate a potential bullish shift. Firstly, there is a bullish divergence on the weekly Relative Strength Index (RSI) near the 40 level. 

This divergence suggests that while the stock's price was declining, the RSI was starting to increase, indicating a possible reversal in momentum. Secondly, the stock has broken through a bearish trend line that had been in place for approximately 2.75 years. This trend line breach is a critical signal, suggesting that the long-term bearish trend may be reversing to a bullish trend. 

Based on these technical indicators, investors and traders are advised to "go long" on Balaji Amines, purchasing shares within the price range of Rs 2,375-2,400. 

The stock is projected to have an upside target of Rs 2,760 per share, highlighting a significant profit potential. To mitigate risk, it is recommended to place a stop-loss near Rs 2,200 per share on a daily closing basis, ensuring protection against potential adverse movements.

(Jigar S Patel is a senior manager of equity research at Anand Rathi.Views expressed are his own.)