Investors with medium-term perspective can consider selling the stock of Amtek Auto (Rs 95.3). After encountering significant resistance in the band between Rs 230 and Rs 240 in October 2009, the stock resumed its long-term downtrend that has been in place from its all-time high at Rs 526 registered in October 2007. Medium as well as short-term trends are also down for the stock. Last week, the stock plunged 21 per cent accompanied with good volumes emphatically breaching through its key long-term support zone between Rs 100 and Rs 110. With this steep fall the stock has reinforced its long and medium-term downtrend. It is trading well below its 21- and 50-day moving averages. The 14-day relative strength index, which determines the speed and alteration of price movements, is featuring in the bearish zone. Moreover, weekly and monthly RSI are also featuring in the bearish. Daily as well as weekly moving average convergence divergence indicators are hovering in the negative territory implying downward momentum. Both daily and weekly price range of change indicators are also featuring in the negative terrain implying selling pressure. The stock's medium-term downtrend line is in tact.

We are bearish on the stock from a medium-term perspective. We believe that Amtek Auto has the potential of trending downwards and reach our price target of Rs 76 in the medium-term, following a minor pause around Rs 85. Medium-term perspective investors can consider selling the stock with stop-loss at Rs 105 levels.

Follow up – Jubilant Industries (Rs 199.3)

The stock slipped 7 per cent along with the broader market sell-off in the previous week. However, we reiterate our medium-term bullish outlook with revised target price of Rs 230. Investors with medium-term perspective can accumulate the stock in dips with modified stop-loss at Rs 184.

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

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