Shriram Fin, JublFood, Titan; top picks from Anand Rathi for May 18

Shriram Finance

Recently, Shriram Finance has hit a low near the lower Bollinger band, which often indicates a potential reversal from a downtrend to an uptrend. In the most recent trading session, the stock formed a long-legged doji candlestick pattern precisely at this lower Bollinger band level. 

A long-legged doji, characterised by a small central body and long wicks on both sides, signifies market indecision and potential trend reversal, particularly when it appears at a support level like the lower Bollinger band. 

Additionally, the hourly chart shows that Shriram Finance has established a double bottom structure, and there is bullish divergence in the daily stochastic indicator. 

Bullish divergence occurs when the stock price reaches a new low, but the stochastic oscillator does not, suggesting weakening downward momentum and a potential reversal. 

Given these bullish signals, it is recommended to buy Shriram Finance in the price range of Rs 2,345-2,365. The target for this trade is Rs 2,460, with a stop-loss set at Rs 2,300 on a daily close basis to limit potential losses.

Jubilant FoodWorks

Jubilant FoodWorks has two key technical analysis signals: a bull divergence on the daily Moving Average Convergence Divergence (MACD) indicator and a violation of a bearish trend line that had been in place for 3-4 months.

A bull divergence occurs when the stock price forms lower lows while the MACD indicator forms higher lows, indicating a potential reversal from a downtrend to an uptrend. 

The breach of the bearish trend line suggests a potential shift in the stock's direction from bearish to bullish. 

Based on these signals, we advise investors / traders to "go long" in Jubilant FoodWorks within the price range of Rs 470-475 rupees per share. Additionally, upside target of Rs 526 per share, indicating the potential profit opportunity. 

To manage risk, a stop-loss is advised to be placed near Rs 445 per share, on a daily closing basis.

Titan

Since reaching its peak around the Rs 3,800 mark on April 1st, 2024, the market has experienced a significant downturn, with a decline of nearly 600 points, translating to a 16 per cent loss in price. However, amidst this downturn, a compelling opportunity has emerged. 

Presently, the market exhibits a Bullish AB=CD Pattern with a 1:1 leg ratio, signalling a potential reversal near the Rs 3,200-3,250 zone. This pattern, coupled with a noteworthy observation from the Relative Strength Index (RSI), adds to the allure of the current juncture. 

The RSI indicator reveals a complex structure resembling a W shape within the oversold zone, suggesting a robust potential for an upward price movement. 

Given these favourable technical indications, investors are encouraged to consider buying within the Rs 3,330-3,365 zone, with an optimistic target set at Rs 3,600. To safeguard against adverse price movements, it's advisable to implement a stop-loss order at Rs 3,235, based on daily closing prices.

(Disclaimer: Jigar S Patel is senior manager - technical research analyst at Anand Rathi Shares and Stockbrokers. Views expressed are personal)