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Cinemax India - Buy

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Investors with medium-term perspective can consider buying the stock of Cinemax India (Rs 76).

The company operates one of the largest exhibition theatre chains in India with 25 properties with 74 screens. The stock's downtrend since its listing in February 2007 was arrested at the March 2009 low of Rs 24.3. Both medium- and short-term trends are up for the stock.

However, recently it encountered resistance at Rs 80 and is currently pausing at this level. The medium- term uptrend is likely to accelerate once this level is crossed. The stock is trading well above the 21- and 50-day moving averages.

The daily and weekly relative strength indices are featuring in the bullish zone, reinforcing the medium-term bullish momentum.

Besides, the daily as well as weekly moving average convergence and divergence indicators are steadily rising in the positive territory. Taking into consideration that the intermediate-term uptrend line is in tact for the stock, we are bullish from a medium-term horizon.

We believe that the stock has the prospect of trending higher until it knocks our medium-term price target of Rs 100, with minor pause at around Rs 86. Investors can make use of dips to accumulate the stock while maintaining Rs 64 as medium-term stop-loss.

Follow up – Jyoti Structures (Rs 195.1)

The stock has gained Rs 11 from our recommend price level last week and is heading towards our short-term price target. We maintain our bullish short- and medium-term outlook for the stock. Investors can buy this stock with the targets and stop-loss indicated in the preceding week.

(This recommendation is based on technical analysis. There is a risk of loss in trading.)

Yoganand D.

BL Research Bureau

(This article was published in the Business Line print edition dated January 18, 2010)
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