Positional Trades for September 26, 2024

Positional trading is a strategy where traders hold their positions over an extended period—usually weeks or months—in an attempt to capture price movements beyond the daily fluctuations. On September 26, 2024, several stocks emerged as attractive candidates for positional trading based on key technical indicators, including volume patterns, breakouts, and price momentum. Below is an in-depth analysis of six stocks—TRENT, ELECON Engineering, GRANULES, Surya Roshni, Intellect Design, and HDFC Life—that show potential for significant upward price movements.

1. TRENT

  • Entry Point: Above 7915
  • Stop Loss (SL): 7850
  • Targets: 30-60-90-125-150-175-200 points from entry
  • Holding Period: Few weeks

TRENT, a retail company under the Tata Group umbrella, has consistently been one of the stronger stocks in the retail sector. The stock is on the verge of breaking past its resistance level at 7915, and there is a significant likelihood that it will gain momentum once this level is breached.

Why TRENT Looks Promising:

TRENT’s stock has been in a consolidation phase for several weeks, fluctuating within a narrow price range. Such consolidation often precedes a breakout, and TRENT is currently at a pivotal point. The company has reported impressive sales growth, and its business model, focused on branded retail, is expected to perform well in India’s growing consumer market.

With strong trading volumes, the stock shows a good probability of breaking resistance and moving toward its target price levels. The breakout point at 7915 is a crucial resistance, and surpassing this would signal that the stock is ready to enter a new upward trend. Investors should consider entering the trade above this level, with a stop loss placed at 7850 to minimize downside risk.

The price targets for TRENT are incrementally spaced, beginning with 30 points, going up to 200 points. As with most positional trades, it’s essential to book partial profits along the way and adjust stop losses to secure gains.

2. ELECON Engineering

  • Entry Point: Above 680
  • SL: 650
  • Targets: 700-725-750
  • Holding Period: Few weeks

ELECON Engineering is a key player in industrial machinery and equipment, serving industries like cement, steel, power, and mining. The company’s fundamentals are robust, supported by a strong order book and consistent earnings growth.

Why ELECON Engineering is Attractive for Positional Trading:

ELECON’s stock has demonstrated significant strength in recent weeks, primarily due to improved financial performance and growing demand for industrial equipment. The stock is on the cusp of crossing its resistance at 680, which could trigger a sharp upward movement, reaching the near-term targets of 700, 725, and 750.

The stop loss at 650 provides a safety net, while the stock’s upward potential remains strong due to healthy financials and technical signals like increasing volumes and narrowing price channels. Investors interested in medium-term plays should look to hold ELECON once it breaks through 680, as this would confirm the beginning of a fresh upward trend.

3. GRANULES India

  • Entry Point: Above 565 (modified)
  • SL: 560
  • Targets: 2-4-6-8-10 points from entry
  • Holding Period: Few weeks

GRANULES India, a pharmaceutical company specializing in the manufacture and sale of bulk drugs, has been showing promising technical signals. Despite its volatility, the stock is ready to cross the 565 level, which has been a resistance point for some time.

Why GRANULES Could Be a Strong Positional Play:

GRANULES India has seen rising demand for its products in global markets, especially in the generics space, and the stock’s strong financials make it a good candidate for a positional trade. Breaking above 565 would signal a potential short-term rally, with incremental targets every 2 points up to 10 points.

While the movement might appear modest, it’s important to note that GRANULES has often exhibited quick movements once key technical levels are breached. The stop loss at 560 offers a reasonable risk-reward ratio, making this stock an appealing choice for traders looking to capture smaller, quick gains over a few weeks.

4. Surya Roshni

  • Entry Point: Above 720
  • SL: 650 (modified)
  • Targets: 725-750-775-800
  • Holding Period: Few weeks

Surya Roshni, a diversified company in lighting and steel pipe manufacturing, has shown signs of significant price movement driven by business expansion in both sectors. Surya Roshni’s stock is poised to break past its 720 resistance, indicating a possible continuation of its upward trajectory.

Why Surya Roshni Is a Strong Contender for Positional Trading:

The company’s business model, which spans the high-demand sectors of lighting and steel pipes, positions it well in both domestic and international markets. The stock has displayed strong volume patterns, indicating institutional interest, and the technical chart is aligning for a breakout.

Surya Roshni’s incremental targets are spaced at 725, 750, 775, and 800. The stock is particularly well-suited for traders who prefer mid-cap opportunities with the potential for sizable returns. The stop loss at 650 offers a wide buffer for volatility, while the reward potential makes this an appealing medium-term trade.

5. Intellect Design Arena

  • Entry Point: Above 1045
  • SL: 1010
  • Targets: 1075-1100-1150-1200
  • Holding Period: Few weeks

Intellect Design Arena, a leader in global financial technology solutions, is another strong candidate for positional trades. With its specialized software solutions for banks and financial institutions, the company has seen impressive earnings growth, especially with the increasing demand for digital banking solutions worldwide.

Why Intellect Design Is Poised for Growth:

The fintech industry is booming, and Intellect Design Arena is well-positioned to capitalize on this trend. The stock is showing technical indicators of a breakout above 1045, with strong volume support. This breakout could lead to significant price movement, making it a prime candidate for positional trading.

Targets for Intellect Design are set at 1075, 1100, 1150, and 1200, indicating a strong upward potential. The stop loss at 1010 ensures that downside risks are managed while allowing enough room for price fluctuations.

6. HDFC Life Insurance

  • Entry Point: Above 730
  • SL: 710
  • Targets: 740-750-760
  • Holding Period: Few weeks

HDFC Life, one of the leading players in the Indian life insurance industry, remains a favorite among long-term investors. However, the stock also presents significant opportunities for positional trades. With a growing insurance market and strong financials, HDFC Life is on the verge of a breakout above 730.

Why HDFC Life Is a Good Positional Trade:

The life insurance sector has witnessed significant growth, driven by increasing awareness of financial security and government policies promoting insurance penetration. HDFC Life has consistently delivered strong results and continues to innovate its product offerings, making it a top choice for investors.

The stock is ready to breach its 730 resistance, and once this level is crossed, the price could move to 740, 750, and 760 in the short term. The stop loss at 710 ensures that risk is contained while offering a relatively low-risk opportunity to benefit from an upward trend in the life insurance sector.

Key Considerations for Positional Trading

  1. Risk Management: Every trade has an associated stop-loss level to manage risk. Traders should strictly adhere to these levels to avoid unnecessary losses.
  2. Volume Indicators: Each of these stocks has shown strong volumes, indicating institutional interest. Breakouts on high volumes are more likely to sustain and lead to significant upward movements.
  3. Incremental Targets: For each stock, price targets are spaced out. Traders should consider booking partial profits at each level to secure gains while keeping some exposure for higher targets.
  4. Holding Period: These trades are designed for medium-term holds, typically a few weeks. Positional traders should be prepared for both upward price movement and short-term volatility during the holding period.
  5. Consultation: As always, it’s advisable to consult with a financial advisor before entering any trade. Each trade has its risks and rewards, and professional guidance can help tailor these recommendations to your specific risk tolerance and financial goals.

Conclusion: Positional Trading Opportunities for Sept 26, 2024

The stocks analyzed for positional trades—TRENT, ELECON Engineering, GRANULES, Surya Roshni, Intellect Design Arena, and HDFC Life—offer promising setups for traders looking for medium-term opportunities. These stocks are poised to break key resistance levels, backed by strong fundamentals and volume patterns.

Traders should approach these opportunities with a focus on disciplined risk management, ensuring that stop-loss levels are adhered to. Additionally, booking profits incrementally at target levels can help maximize gains while minimizing risk. The market environment continues to present volatility, but with the right strategies in place, these positional trades can offer lucrative returns in the weeks to come.

ALSO READ: Positional Trading Ideas for September 24, 2024

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