Signs of bullish reversal
The stock of Coforge, which was on a decline since the beginning of this year after facing resistance between ₹5,700 and ₹6,000, found a strong base at ₹3,260. In September, it bounced off this support and tried to establish an uptrend. By breaching the hurdle at ₹3,985-4,000 last week, the stock confirmed a short-term bullish trend reversal. Although there is a minor resistance at ₹4,830, we expect the stock to gain more momentum going forward and appreciate to ₹5,680 within a couple of quarters.
Therefore, traders can go long on the stock now at around ₹4,238 and add more shares to the holding when price dips to ₹4,000. When the price moves beyond ₹4,830, alter the stop-loss to ₹4,550. On a rally past ₹5,200, move the stop-loss further up to ₹5,000. Liquidate all the longs at ₹5,680.
Cummins India (₹1,442.1)
Good upward momentum
Ever since hitting a low of ₹280 in April 2020, the stock of Cummins India has been on a strong uptrend. Although it made intermittent price corrections, the broader trend stayed bullish, and it remains true even now. Last week, it moved past ₹1,385 and confirmed a bull flag pattern on the daily chart. The pattern hints at a sharp rally towards ₹1,580. That said, traders should be prepared for a possible price correction to ₹1,400.
So, we suggest initiating fresh longs worth three-fourths of the amount that you intended to allocate to this stock at current levels — at ₹1,442. Accumulate for the remaining one-fourth when price touches ₹1,400. Thus, the average buy price would be around ₹1,430. Keep initial stop-loss at ₹1,350. Tighten it to ₹1,470 when the price rises above ₹1,500. Exit all the longs at ₹1,580.
JK Cement (₹3,236.35)
Confirms inverse H&S
Since July this year, the stock of JK Cement has been on a recovery after taking support at ₹2,050. The rally continued in the subsequent months. Consequently, the scrip crossed over the resistance at ₹3,000 and it confirmed an inverse head-and-shoulder pattern last week, indicating a bullish reversal. The scrip has the potential to appreciate to ₹3,760 in two to three months.
But before that, we might see a minor correction from here, possibly to ₹3,000. Hence, one can buy the stock at the current level of ₹3,236 and accumulate on dip to ₹3,000. Place stop-loss initially at ₹2,785. The moment the stock breaks out of ₹3,500, revise the stop-loss up to ₹3,300. Exit all the longs at ₹3,760. The price band of ₹3,760-3,800 is a resistance band against which we might see its price moderate.