Comments
Bank of India (₹46.15)
Tracing downward channel
The stock of Bank of India, which is on a long-term downtrend, began its latest leg of southward movement in June 2021 from about ₹85, which is a considerable hurdle. Particularly, the price action since September last year shows that the stock is tracing a downward channel. Meaning the descent has been steady. We expect the channel to stay true and since the scrip is trading currently at the top of the same, it could see another drop from here. The nearest supports are at ₹41 and ₹38.50. We see the stock depreciating to ₹38.50 in about three months.
On the upside, ₹50 is a solid resistance. So, traders can initiate fresh shorts with stop-loss at ₹50.15 at the current level of ₹46.15. When price drops to ₹41, exit half of the positions and alter stop-loss to ₹45. Liquidate the leftover at ₹38.50.
ICICI Lombard GI (₹1,121.05)
Cracks a base
The stock of ICICI Lombard General Insurance company has been on a decline since September last year, after marking an all-time high of ₹1,625. Last week, it breached an important support at ₹1,215. Notably, the stock had rebounded twice off this level in the last two years. Now that it is breached, the outlook has turned negative. While ₹1,120 is a minor support and there can be some recovery, it is likely to be capped at ₹1,215 which has now turned a strong barrier.
Eventually, the stock will resume the downswing and slip below ₹1,120 to drop to ₹1,000 and then to ₹925 within three months. So, traders can short now at ₹1,121 and on a rally to ₹1,215 with stop-loss at ₹1,280. At ₹1,000, book one-third of the total positions and tighten stop-loss to ₹1,150. Exit the remaining at ₹925.
UltraTech Cement (₹5,511.05)
Confirms head & shoulder
The stock of UltraTech Cement lost upward traction in July 2021. It then consolidated for some time and began falling in February this year. As bears gained strength, the stock invalidated the support at ₹5,820 a fortnight ago. That also confirmed the head and shoulder pattern on the daily chart and that means the trend has turned bearish. Although it can rally and retest the support-turned-resistance of ₹5,820, a recovery beyond this level is less likely.
In the coming months, the stock can decline below ₹5,000 and touch ₹4,640, which can be the target prices for the shorts. That is, short the stock now at ₹5,511 and add more shorts at ₹5,820 so that average selling price is ₹5,666. Keep stop-loss at ₹6,200. When the stock falls to ₹5,000, tighten the stop-loss to ₹5,600. Exit all the shorts when price declines to ₹4,600.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.