Chart Focus: Pantaloon Retail (India) — Buy

Yoganand D. BL Research Bureau | Updated on July 03, 2011


Investors with a medium-term perspective can consider buying the stock of Pantaloon Retail (India) (Rs 318.4), that owns and operates a chain of retail stores. After peaking at Rs 527 in October 2010, the stock was on an intermediate-term downtrend until it found support at its longer-term base between Rs 225 and Rs 235 in February this year.

Triggered by positive divergence in weekly relative strength index (RSI) and backed with significant support, the stock changed direction. The significant support band between Rs 225 and Rs 235 again cushioned the stock from declining further in mid-March and May. The stock has been on a nascent short-term uptrend from mid-May.

We notice that there has been good volume support during advance days of the stock's current uptrend. Last week, the stock surged 13 per cent emphatically breaking through its key immediate resistance at Rs 300. It is currently hovering well above its 21- and 50-day moving averages. The 14-day RSI is featuring in the bullish zone and the weekly RSI is inching higher in the neutral region towards the bullish zone. Both the daily and weekly moving average convergence-divergence indicators are moving higher in line with the stock price, signalling upward momentum. Daily price rate of change is featuring in the positive territory and weekly price rate of change indicator has just entered into this territory deciphering buying interest.

We are bullish on Pantaloon Retail from a medium-term perspective. We believe that it has potential to trend northwards and reach our medium-term price target of Rs 380.

However, we don't rule out a minor pause around Rs 350 during this uptrend. Investors with medium-term perspective can buy the stock with stop-loss at Rs 290.

Follow up — Autoline Industries (Rs 162.7)

The stock fell 3 per cent last week. However, we adhere to our medium-term bullish forecast on the stock with the price target and stop-loss as mentioned last week.

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

Published on July 03, 2011

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor