Why you Shouldn't Give this Adani Stock a Miss for Trading

  • Stock Market Analysis

About the company:

Adani Enterprises (NS: ADEL ) Ltd is an Adani (NS: APSE ) Group company with business interests in economic areas such as mining, integrated resources management, infrastructure such as airports, roads, rail/ metro, water, data centers, solar manufacturing, agro, and defense. The stock is trading at a 4.17% discount to its all-time/52-week high level. The 52-week high and 52-week low range is Rs 1,718 – Rs 303.

Technical observations:

One week time frame: (Chart 1)

On a weekly time frame, you can observe that Adani Enterprises' share has broken out of a Symmetrical Triangle pattern in the week of October 11, 2021. We can see that the stock was consolidating in this pattern for more than four months. We anticipate seeing a continuation of the upward move in the near future aided by higher volumes. Relative Strength Index (or RSI) line took support at 60 and has now crossed 65 level. It denotes positive momentum on the scrip. Long-term investors should enter at the current level. They should maintain the stop loss at Rs 1,381 (which is the previous swing low) on a weekly closing basis.
AE1
One day time frame: (Chart 2)

On a daily time frame, we can see that Adani Enterprises' share has been trading in a range of Rs 1,335 and Rs 1,600 since June 14, 2021. Today, the scrip broke out of this range. Above-average volumes support the upward move. Note that on June 14, 2021, the share had opened the gap down. The gap is now filled after four months. The scrip has ably taken support on the 50-day EMA line while trading in the above-mentioned range. RSI is above 65 and the MACD line is above the signal line indicating positive momentum on the share. Positional traders should enter at current levels. They should maintain the stop loss at Rs 1,765 on a daily closing basis.
AEL2
Conclusion:

We believe Adani Enterprises to maintain positive bias and move higher going ahead. Short-term traders should take a position at the current level while keeping a strict stop loss of Rs 1,585 on a daily closing basis. Our view will negate below the level. 

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