Ashok Leyland (₹163.65)
Hits 52-week high
The stock of Ashok Leyland rebounded from the 50-day moving average support last week at around ₹142. The rally was strong enough to lift the stock above a critical resistance at ₹150. Going ahead, it could see a corrective decline towards the resistance-turned-support level of ₹150. However, the stock will eventually resume the uptrend. Although the price band of ₹165-168 is a resistance, we expect the stock to rally past this hurdle. It can appreciate to ₹185 by this year-end.
Considering the above factors, one can initiate buys in two legs. That is, buy the stock at the current level of ₹163 and accumulate when the price dips to ₹150. So, the average buying price would be ₹157. Place initial stop-loss at ₹142. When the scrip moves above ₹175, tighten the stop-loss to ₹163. Exit at ₹185.
Biocon (₹295.6)
Marks lower low
The stock of Biocon has been in a downtrend since early 2021. The trend turned bearish after facing resistance at ₹488 in December 2020. The fall extended and consequently, the stock slipped below the support of ₹300 last week after a brief period of consolidation. This has increased the probability of a fresh decline from here. Although there is a possibility for the scrip to see a rally to ₹325, we expect it to reverse downward and continue the decline.
The price is likely to decline to ₹250 over the medium term. Considering the above factors, one can consider initiating short positions at the current level of ₹295. Add more shorts when the stock rallies to ₹325. Place initial stop-loss at ₹345. When the price drops below ₹275, shift the stop-loss down to ₹295. Liquidate all the shorts when price touches ₹250.
Karur Vysya Bank (₹68.75)
Breaches a barrier
The stock of Karur Vysya Bank, which was in a downtrend since September 2017, reversed after taking support at ₹20 in April 2020. But since March 2021, the stock was largely moving in a sideways trend. It was oscillating between ₹40 and ₹62. But it broke out of the resistance at ₹62 last week, opening the door for further appreciation. Over the medium term, it can probably rally to ₹95.
However, there could be a price correction towards ₹55 before beginning the rally to ₹95. So, one can consider going long on the stock at the current level of ₹69. Add more longs when price dips to ₹55. Keep initial stop-loss at ₹45 and tighten this to ₹70 when the scrip rallies past ₹80. Since the price band of ₹95-100 is a barrier, liquidate the longs at ₹95.
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.