[Premium] Stocks To Watch This Week

July 22, 2019

While updating this Chartbooks this weekend there were a few stocks that we've spoken about in the past, but I wanted to follow up on given they're near actionable levels.

Several shorts, a few longs, and one to keep on your radar.

Let's take a look.

As we discussed in the Conference Call last week, things are still very messy and India's relative strength versus the rest of the world continues to fade.

With selling hitting Large-Caps more so than it has in the past, our expectation is for a retest of the 2019 lows in the Mid and Small-Cap indices, at which point we'll see if buyers step in and defend those levels for the third time.

If we do see additional selling this week, we'd expect for names like IDBI Bank Ltd. that have been consolidating near their lows to finally break down. If that's the case, we want to be selling the stock below 33.25 and looking for a longer-term target down near 25.00.

Same for IDFC Limited if it breaks below 34.50, with a target near 27.50.

Page Industries Ltd. has been unable to reclaim support near 21,400, which suggests the bias is to the downside and that we should be short with a target near 17,000.

Madras Rubber Factory Ltd. has been consolidating below our initial downside target of 57,000 and looks ready to roll over again. As long as prices are below that level, further downside towards 46,500 looks likely.

Sun Pharma is back at former support, offering an attractive entry on the short side against 435. As long as prices are below that level we can be short with an initial target at 370 and a longer-term target of 282.

Within Small-Caps, Can Fin Homes Ltd. is attempting to confirm a bearish to bullish reversal by getting back above its downtrend line and 38.2% retracement of its 2017-2018 decline near 390. As long as prices are above that level, we can expect some further consolidation before a move towards 495.

Apollo Hospitals continues to impress us with its relative strength as well. While not super actionable for our timeframe until we make new highs, the bias is to the upside and it's definitely one to watch in the weeks and months ahead.

If you prefer the "trash to treasure" mean-reversion trades, IRB Infrastructure looks to be confirming a bullish divergence and failed breakdown by staying above 85.90. As long as prices are above that level we can be long with targets of 105 and 117.