Stock name: Redington Ltd.
Pattern: Double top pattern
Time frame: Daily
Observation:
Since October 2023, the stock has been on an upward trend. It later stabilized, forming a double top pattern on the daily chart. On August 5, 2024, the stock broke out of this pattern, with the breakout supported by above-average trading volume and a bearish MACD indicator. Post-breakout, the stock is trading below the neckline of the pattern. Technical analysis suggests that if the breakout momentum continues, the stock may continue to decline.
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Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.
Stock name: K.P.R. Mill Ltd.
Pattern: Cup and handle pattern and retest
Time frame: Daily
Observation:
The stock has generally trended upward. From November 2023 to August 2024, it formed a cup and handle pattern on its daily chart. On August 6, 2024, the stock broke out of this pattern, supported by high trading volume and a bullish MACD indicator. After the breakout, it saw an immediate retest, therefore some additional confirmations are pending to conclude the breakout. Currently the RSI is in a favourable zone. According to technical analysis, if the stock rebounds from the retest and gains momentum, it may continue to move upwards.
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Disclaimer: This analysis is purely for educational purpose and does not contain any recommendation. Please consult your financial advisor before taking any financial decision.
News for the day:
- The RBI's Monetary Policy Committee kept the repo rate unchanged at 6.5% for the ninth time, as announced by Governor Shaktikanta Das. The inflation forecast for FY25 remains at 4.5%, and GDP growth is projected at 7.2%. Market expectations align with these decisions, which continue to focus on controlling inflation despite food price and geopolitical concerns. The June meeting saw similar outcomes, with steady rates and an emphasis on economic stability.
- Torrent Pharma and Zydus Lifesciences are competing to acquire JB Chemicals and Pharmaceuticals, with KKR, the current owner, shortlisting both firms. Torrent has begun financing discussions, while private equity firm EQT is also expected to join the bid. Dr. Reddy's Laboratories has shown interest but hasn't submitted an offer. The acquisition, potentially costing up to $2.8 billion, includes a mandatory open offer for an additional 26% stake. The deal could significantly boost annual sales for Torrent or Zydus, though industry analysts note that payback may take several years due to already optimized costs by KKR.
- Bata India is in talks with quick commerce companies to offer 10-minute delivery for high-demand footwear items to boost sales. Despite recent sluggish sales and a slight revenue decline, the company is focusing on athleisure products, social media marketing, and store renovations to attract new consumers. Rising competition from D2C brands has kept Bata's market share steady. Bata aims to leverage its large scale and presence to enhance customer experience and meet the demand for quick fulfilment.
