After testing key support at around Rs 11,500, MRF did a volte face and surged 12 per cent with good volumes last week. With this rally, the stock appears to have resumed its medium as well as long-term uptrend. Nevertheless, the stock is currently testing important resistance at Rs 13,000. Strong breakthrough of this resistance will take the stock higher to its 52-week high registered at Rs 13,850 in early January this year. Continuation of the stock’s uptrend will push it higher to the psychological level of Rs 15000 in the medium-term.
Inability to surpass Rs 13,850 will confine the stock to moving sideways in the band between Rs 12,300 and Rs 13,850 before rallying upward. Significant supports below Rs 12,300 are positioned at Rs 11,500 and then at Rs 11,000. A decisive weekly close below Rs 11000 can mitigate the stock's medium-term uptrend and drag it down to Rs 10,000 levels.
Adani Power (Rs 50.6)
Adani Power rose 12 per cent accompanied by extraordinary volume in the past week, reversing from key base at Rs 44. The stock’s reversal has been backed by positive divergence in the daily relative strength index. This up move will face immediate resistance at Rs 53.5 levels. The daily indicators have entered the neutral region from the bearish zone.
After encountering resistance at around Rs 68 in late January this year, the stock started to decline and has been on a short-term downtrend. To alter this downtrend, the stock needs to conclusively rally above Rs 56. In that scenario, the stock can trend northwards to Rs 61 or to Rs 68 in the medium-term.
On the other hand, downward breakthrough of the key support at Rs 44 will reinforce the stock's medium-term downtrend and pull it down to Rs 40. Subsequent key support for the stock is pegged at Rs 37.