2 Breakout Shares that Cheered Investors on Tuesday!

  • Stock Market Analysis
  • Editors Pick

Tuesday’s session was also a green one after Monday, with the benchmark Nifty 50 index closing 0.15% up at 17,769.25. The day was full of stocks witnessing a buying spree, especially the railway stocks. Here are 2 stocks that can be put on the watchlist for the next few sessions.

Varroc Engineering Limited

Varroc Engineering Ltd (NS: VARE ) is an auto parts manufacturer, having a market capitalization of INR 4,087 crores and trades at a TTM P/E ratio of -3.57. The stock has formed almost a picture-perfect double bottom chart pattern on the daily time frame which is setting it up for a good reversal. The first bottom was made on 28 February 2023 and the second one, on 29 March 2023.

Daily chart of Varroc Engineering with volume bars at the bottom

Image Description: Daily chart of Varroc Engineering with volume bars at the bottom

Image Source: Investing.com

Today, the stock surged 5.23% to INR 281.55 and closed above the resistance of the pattern, essentially marking a breakout. Today’s volume also jumped over 1.08 million shares which is 958% higher than the 10-day average volume of 102K shares. As the pattern is complete, traders can position themselves for a long trade for targets of up to INR 320. The ideal stop loss is below the pattern’s low, at INR 239.

SJVN Limited

SJVN Ltd (NS: SJVN ) is engaged in the business of generation and sale of power, having a market capitalization of INR 13,105 crores. It is also a good dividend stock, with a current yield of 5.1%. The stock jumped 4.05% to INR 34.7 and broke above an important resistance of INR 33.5 - INR 33.7. This level was keeping the stock from rising for the last couple of months.

Daily chart of SJVN with volume bars at the bottom

Image Description: Daily chart of SJVN with volume bars at the bottom

Image Source: Investing.com

The breakout was also accompanied by a high volume of 9.18 million shares, which is the highest one-day volume this month. The stock closed noticeably above the resistance therefore waiting for a retracement is a good idea. On the upside, INR 37 - INR 37.5 could easily come on the screen in the next two weeks. A stop loss can be maintained below the swing low of INR 32.4.

Read More: Bond IPO: A Good Opportunity for Passive Investors

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