Buy ideas for May 16: Cyient, Aether, Clean Science; check target prices

Cyient :

After experiencing a correction of approximately 500 points, translating to a significant 24 per cent decline, Cyient has now reversed its trajectory from the previous support level of Rs 1,700.

Notably, this support level aligns with the lower Bollinger band, suggesting a potential bounce back, especially considering the bullish crossover observed on the stochastic indicator at the daily scale, indicating an attractive opportunity. 

Therefore, investors are advised to consider buying within the range of Rs 1,735 to Rs 1,765, anticipating an upward movement with a target price of Rs 1,900. To manage risk, a stop-loss order should be placed near Rs 1,675, based on daily closing prices, to limit potential losses.

Aether:

Following a correction of roughly 60 points, equating to a notable 7 per cent downturn, Aether has shifted its course away from the prior support mark of Rs 800. 

This support level notably coincides with the lower Bollinger band, implying a potential rebound, particularly given the bullish crossover on the stochastic indicator at the daily scale, signifying an appealing opportunity. 

Consequently, investors are advised to contemplate purchasing within the range of Rs 830 to 840, envisioning an upward trend with a target price of Rs 900. 

To manage risk effectively, it is recommended to implement a stop-loss order near Rs 803, centred on daily closing figures, to mitigate potential losses. This strategy aims to harness the anticipated bullish momentum while safeguarding against downside risks.

Clean:

Currently, Clean Science has formed a double bottom pattern on the daily scale, indicating a potential reversal in its price trend. This pattern typically signifies a period of price decline followed by a rebound, characterised by two consecutive troughs with a moderate peak in between. 

Alongside this pattern, there is a bullish divergence observed on the Relative Strength Index (RSI) at the daily scale. This divergence occurs when the price makes new lows while the RSI indicator shows higher lows, suggesting a weakening downward momentum and a potential impending upward movement in the price.

Moreover, Clean Science has successfully held onto its historical support zone ranging between Rs 1,280 to Rs 1,300, further bolstering the bullish sentiment surrounding the stock. This historical support zone has demonstrated its significance in the past, acting as a level where buying interest has historically emerged, adding credence to its current attractiveness.

Given these technical indicators and the prevailing market conditions, it is suggested that investors consider initiating long positions within the range of Rs 1,300 to Rs 1,320. This range provides an opportune entry point for investors to capitalise on the anticipated upward movement in Clean Science's stock price. 

With an upside target set at Rs 1,400, investors can aim to capture potential gains as the stock price is expected to ascend. To manage risks effectively, a stop-loss order is recommended to be placed near Rs 1,265.

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