Holding or Folding? Chart Signals for Reliance, Colgate, HDFC AMC and Nifty MidCap

  • Stock Market Analysis

Greetings everyone! 

Today, we will be looking at three stocks and one index. However, we will look at Colgate (NS: COLG ) and HDFC AMC in this article. We will analyse Reliance and Nifty Midcap via a YouTube video shared below. I chose to look at Reliance, as the analysis I shared in my last video was spot on, and now we have a new trading opportunity in it. Moreover, I have analysed the Nifty Midcap index, as it has its expiry today. Plus, last week’s expiry in it was rather eventful. I say this as the expiry tested many options traders due to a sudden spike that occurred, which was then made worse by broker platforms breaking down. Hence, the video should provide you with important insights for this expiry.

Now first up, let’s talk about Colgate. This stock has had a stellar performance for the whole of 2023 and part of 2024. However, that seems to be coming to an end. This is as on the weekly chart, the equity appears to be entering a consolidation phase. Various factors support this, such as the stalled momentum. This is because the stock has been trading within the same range for the past two weeks on the weekly chart. Secondly, the stock has seen a change in the volume buildup. I say this as, for the past couple of weeks, the stocks’ volume buildup has been extremely bullish. But that seems to have changed, as in the previous week the volume buildup has turned mildly bearish. Third, the trend indicator seems to have had a change of heart. This is as it had been flat for the past few weeks but has now started sloping downward. This suggests a potential pause in the uptrend. Hence, as long as Colgate were to stay below the resistance zone between ₹2800 and ₹2850, then it would force the stock to enter a consolidation phase.

So, how can we potentially trade this? The trade plan will be different for option sellers, option buyers, and equity traders. For option sellers, if the price were to remain below ₹2800 - ₹2850, then selling call options could be a profitable strategy. While for option buyers, if the stock on the daily chart were to break below the support level of ₹2610 then this would signal a potential drop to the supports at ₹2540 and ₹2480. This scenario could create buying opportunities for put options which are in the money. 

Now, let’s shift our focus to HDFC Asset Management (NS: HDFA ). I chose to cover the stock, as it has been trading within a box range since February 2024. However, it has now sparked my attention, as it is exhibiting weakness near the support zone of the box range. This is because a decisive break below the support level could signal a significant trend change. 

Coming to my trading strategy for HDFC Asset Management. Now all my trades on the stock would be based on the daily chart as I am not an equity investor in the stock. Hence, I am not looking at some medium or long-term play here. I am looking at more of a quick dine-and-dash scenario. Now if the stock were to break the low of Friday, then this could trigger a decline to the box range support of ₹3580. However, once we reach ₹3580, then this support zone holding will be key. I say this as a break of ₹3580 would alter the price structure, which would end the consolidation phase. Thus, if ₹3580 were to break, then this could pave the way for a further slide towards ₹3450 and even ₹3200.

In summary, both Colgate and HDFC AMC stand at an interesting juncture in their price action journeys. This is as Colgate appears to be transitioning into a consolidation phase. While HDFC AMC might be on the cusp of a clear trend change. If both were to play out as expected, then derivative traders would get a great opportunity in both. Lastly, do check out the linked YouTube video below for an analysis of Reliance Industries (NS: RELI ) and Nifty Midcap.

Happy trading. 

Disclaimer: The investments discussed by Sandeep Singh Ahluwalia may not be suitable for all investors. Thus, you must trust your analysis and judgement before making investment decisions. The information provided is for informational purposes only and should not be interpreted as a proposition to buy or sell any securities.

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  • Ravindra Joshi @Ravindra Joshi
    Well explained, man👍
    Like 0

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