Titan: Are Investors Walking Into a Trap?

Today, I will be looking at Titan (NS:TITN). This, as it is, has been on a positive trajectory over the past seven weeks which has resulted in it rising by approximately 15%. However, the stock has now reached a major resistance zone, which calls for a careful assessment of its future price movements.

At present, Titan finds itself in a challenging spot. I say this as it is a stone’s throw away from my quant resistance zone. This is as the range between Rs. 3,250 and 3,300 will pose a significant hurdle for the equity and will act as a trap for eager traders.

Thus, considering the resistance, I expect Titan to start trading within a box range pattern that will be between Rs. 3,070 and Rs. 3,250. This is because we have a quant support zone at Rs. 3,070 which will provide excellent support. Therefore, for the stock to break through this barrier the bears will require a substantial shift in the stock's dynamics, particularly in terms of the bullish and bearish volume breakdown.

This is because the bullish volume buildup is significantly higher, which makes a medium-term breakdown less likely. I say this as when we break down last week’s volume we see that 71% of it was bullish while a mere 29% was bearish. Thus, until this distribution shifts, Titan will remain trapped within a new box range pattern. Consequently, over the next few weeks, the stock is poised to become a darling for option sellers who can capitalize on the range mentioned above by selling both CEs and PEs to yield a decent return.

In conclusion, Titan currently stands at a major crossroad. Thus, it is prudent to manage expectations and understand that a significant rise or fall is unlikely in the near term. Instead, we are more likely to witness the formation of a box range, which will prove frustrating for some investors. But, on the other hand, it shall be beneficial to option sellers. 

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