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Weekly Picks 3rd July 2023

Written by - Fisdom Research

July 1, 2023 7 minutes

1. Tata Consultancy Services

CounterTCS LTP 3300.50
CallBuy on dip
Target 13420
Target 23650
Stop LossBelow 3200
Time Horizon3-4 weeks
NotesBuy-on-dip towards 3300 & 3240

Tata Consultancy Services is an IT services, consulting, and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive-powered, integrated portfolio of business, technology, and engineering services and solutions. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development.

Previous Close3215.5TTM EPS115.2
52 Week High3575.0TTM PE28.7
52 Week Low2926.1P/B13.5
Sector PE29.2Mkt Cap (Rs. Cr.)12,08,310

(Source: Moneycontrol, BSE, Fisdom Research)

Technical Outlook

(Source: Fisdom Research)

  • TCS has been experiencing a period of “Consolidation” and has been under pressure for the past year.
  • Over the last five quarters, the stock has established a strong base around the 3000 level, suggesting that this is a significant and critical long-term support level for the next year or more.
  • Within the current range, the stock closed positively last quarter above the 3300 level, suggesting a potential retest of its recent high in the 3550-3600 zone.
  • Investors can consider buying the stock for short to mid-term delivery at current levels and on dips as per the levels mentioned, anticipating a pull-back.
  • In the short term, 3180 can be seen as a crucial support level, while on the higher end, 3420 and the next higher major 3650-3700 can be seen as potential target levels and mid-term resistance zones.

Open Interest Study

(Source: Fisdom Research)

  • The TCS July series Option Chain Study shows the highest Put Option (PE) build-up at 3200 and next at 3300 strike levels, indicating these as support levels.
  • On the higher end, the maximum Call Option (CE) build-up is seen at 3400 and 3300 strikes.
  • This setup suggests that the range for the stock is capped on the upside.
  • Since it’s the beginning of the series, further developments in the Option Chain study will provide a clearer picture of the existing sentiments for the stock.
  • Based on the current setup, one can consider “Hedged Long” strategies for the July Series with support at the 3200 strike level.

F&O Strategy

ScripTCS LTP 3300.50
RiskModerate
Ratio1:2
BiasRange to positive
Max Reward Expected₹ 26,950
Max Risk Expected₹ 8,050
ActionScripQTYIPLTP
BUYTCS JUL 3300 CE1757474
SELLTCS JUL 3500 CE3501414
Invest Now

2. Apollo Hospitals Enterprise Limited

CounterAPOLLOHOSP LTP 5095.60
CallBuy on dip
Target 15530
Target 25620
Stop Loss4800
Time Horizon3-4 weeks
NotesBuy-On-Dip towards 5100 & Avg around 4920

Apollo Hospitals was established in 1983 by Dr. Prathap C Reddy, renowned as the architect of modern healthcare in India. As the nation’s first corporate hospital, Apollo Hospitals is acclaimed for pioneering the private healthcare revolution in the country. Apollo Hospitals has emerged as Asia’s foremost integrated healthcare services provider and has a robust presence across the healthcare ecosystem, including Hospitals, Pharmacies, Primary Care & Diagnostic Clinics and several retail health models.

Previous Close5128.0TTM EPS57.0
52 Week High5294.0TTM PE89.5
52 Week Low3635.2P/B12.4
Sector PE67.2Mkt Cap (Rs. Cr.)73,304

(Source: Moneycontrol, BSE, Fisdom Research)

Technical Outlook

(Source: Fisdom Research)

  • The stock has been trading within a specific range for an extended period.
  • In the first week of June 2023, the stock price broke above the 5000 mark for the first time since November 2022 and then entered into another period of consolidation.
  • For the past four weeks, the stock has been consolidating above the 5000 level and is expected to see a significant upward movement in the coming days.
  • Traders can consider buying the stock if it stays above the 4830 and major 4600 levels, anticipating a rise towards 5620 and major 6060 levels in the upcoming weeks.

Open Interest

(Source: Fisdom Research)

  • The option study for the July series so far suggests that a base is forming around the 5000 level.
  • The stock has the highest Put Option build-up at the 5000 Strike price, while the highest Call Option build-up is at the 5200 level, which could be an immediate obstacle.
  • As it’s just the beginning of the series, further developments in the Option Chain can provide a more accurate sense of market sentiment for this month.
  • Overall, the immediate bias could be a “Range to Up” above the 5000 level.

F&O Strategy

ScripAPOLLOHOSP LTP 5095.6
RiskModerate
Ratio1:1
BiasRange to positive
Max Reward Expected₹ 20,250
Max Risk Expected₹ 17,250
ActionScripQTYIPLTP
BUYAPOLLOHOSP JUL 5000 CE125220220
SELLAPOLLOHOSP JUL 5300 CE1258282
Invest Now

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