Sizzling Stocks - Tata Global Beverages (Rs 101.3)

Yoganand D. | Updated on March 12, 2011



Tata Global Beverages (Rs 101.3)

Following reports that the country's tea production dropped 23 per cent in the month of January 2011 due to bad weather, tea stocks gained momentum and rallied on expectations of an increase in realisations. Tata Global Beverages too participated in this rally during the week and finished 11.6 per cent higher, accompanied by good weekly volumes.

The stock's medium-term downtrend that was in place from its October 2010 peak of Rs 138 found support in the range between Rs 87 and Rs 90 in February. However, it subsequently changed directions triggered by positive divergence in daily relative strength index and daily price rate of change indicator.

It is currently testing a significant intermediate-term resistance around Rs 105. Emphatic close above this resistance will take the stock higher to Rs 115 or Rs 120 in the medium-term. On the other hand, reversal from this resistance can drag down the stock once more to the key support band. Strong weekly close below Rs 87 will pull the stock lower to Rs 83 and Rs 80.

Gokaldas Exports (Rs 123.7)

The stock skyrocketed 31 per cent with extra-ordinary weekly volumes last week. In early February 2011, the stock found support around Rs 83 (the July 2009 trough) and changed its course. It has been on a short-term uptrend since then . Nevertheless, the stock is facing a key long-term resistance at Rs 130. Conclusive breakthrough of this resistance can lift the stock higher to Rs 143 and then to Rs 155 in the medium-term.

However, inability to move higher will mean that the stock will resume its intermediate-term downtrend that has been in place since January 2010 peak of Rs 191. It can decline to Rs 105 and then to its next support at Rs 90.

Published on March 12, 2011

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