Tata Elxsi (₹7,183.2)
Bulls in the driver’s seat
The stock of Tata Elxsi is in a steady uptrend since March 2020. While there were minor corrections, it faced a considerable price drop towards the end of 2021 when price dropped from about ₹6,700 to ₹5,300. Nonetheless, the scrip has regained momentum in 2022 and a couple of weeks back, it saw a fresh breakout. Thus, a fresh leg of upmove breaking above ₹8,000 towards ₹8,180 is possible in the near term.
But before this rally begins we expect a minor dip towards the resistance-turned-support level of ₹6,700. Hence, one can consider buying the stock now and on a dip to ₹6,700 with initial stop-loss at ₹6,415. When price moves above ₹7,630, revise the stop-loss upwards to ₹7,150. Liquidate the longs completely when the stock touches ₹8,180.
Lakshmi Machine Works (₹11,049.8)
Consistent higher highs
The stock of Lakshmi Machine Works is on a rise ever since it hit a low of ₹2,000 in March 2020. Although it struggled to breach ₹7,500, the stock managed to gather enough momentum to move past this level in July last year. Indeed it has also rallied past the psychological level of ₹10,000 two weeks back. The scrip could retest ₹10,000 in next two weeks.
But, over the medium-term, it is forecast to appreciate to ₹12,850 with minor pause at around ₹12,000. So, split the investment into three equal parts as follows: Buy at current level, ₹10,575 and at ₹10,000. The average buy would be around ₹10,540. When price touches ₹12,000, liquidate 30 per cent of your positions and alter the stop-loss to ₹11,400 for the rest of the holdings. Exit the remaining at ₹12,850.
The Ramco Cements (₹851)
Range breakdown
The stock of Ramco Cements saw its latest rally between March 2020 and July 2021. In this period, it took support at around ₹460 and marked an all-time high of ₹1,132.7 towards the end of July last year. However, the stock could not rally beyond that level. It confirmed a bearish reversal as it slipped below the support at ₹930 last week and closed at ₹851.
Though the price might rise to ₹930 within a couple of weeks, the stock is expected to continue to fall. It could decline below ₹800 and reach ₹715, a significant support from where there can be a rebound. So, traders can sell the stock at current level and on a rally to ₹930. Initial stop-loss can be maintained at ₹965 but revise it to ₹890 when price breaks below ₹800. Exit the shorts at ₹715.
V-Guard Industries (₹215.2)
Makes lower lows
After making several attempts to breach the resistance at ₹275 since May last year, the stock of V-Guard Industries made a U-turn. It has been steadily depreciating since October last year and has closed below the support at ₹220 last week, hinting at further fall. While ₹200 can be a support, the stock is likely to drop below this level towards ₹193 in two to three months.
A drop below that level can drag down the stock to ₹170 over the medium term. Nevertheless, before the above mentioned down-swing happens the stock could see minor upside to ₹222. Hence, one can short the stock now and on a rise to ₹222 with stop-loss at ₹232. When the stock falls to ₹193, liquidate half of the positions and shift the stop-loss to ₹205. Book leftover shorts at ₹170.
HDFC Life (₹620.5)
Bearish reversal
The stock of HDFC Life Insurance company, which was oscillating in a broad range of ₹660 and ₹740 since the beginning of 2021, broke below the base of ₹660 a fortnight ago. Also, it declined below the support at ₹635 last week, thereby turning the outlook bearish. It will most probably depreciate to the nearest notable support at ₹560 from where there can be a rebound.
Yet, there is a slim chance for the stock to inch up to ₹660 before undergoing the next leg of downmove to ₹560. So, traders can execute shorts worth 75 per cent of the intended amount at current price and the remaining 25 per cent when price rises to ₹660. Place stop-loss at ₹685. When price falls below ₹590, revise the stop-loss to ₹635. Fully exit when the scrip declines to ₹560.
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