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Bharat Forge (₹857.4)
Bulls gathering momentum
By the end of October, the stock of Bharat Forge broke out of the then key resistance at ₹830. Although there was no follow-through rally, the stock is managing to hold above ₹830. Over the last three weeks, it has been appreciating with an increase in volume. This is an indication that the bulls gathering momentum. We expect the stock to resume the rally from here anytime. Or it might see a quick minor drop to ₹790 and then move northwards. The stock has the potential to touch the psychological ₹1,000-mark. We recommend buying the stock at the current level of ₹857. Accumulate more when there is a correction to ₹790. Place the stop-loss at ₹740 initially. Revise it up to ₹900 when the stock touches ₹950. Liquidate all your longs at ₹990 as the stock might witness a fall after testing the ₹990-1,000 price region.
Dalmia Bharat (₹1,847.45)
Inverse Head & Shoulder breakout
The stock of Dalmia Bharat saw a decline last week. However, prior to that, it had rallied and confirmed an inverse head-and-shoulder pattern, which indicates there is good upward potential. While the downswing might even extend to ₹1,770 from here, we expect the stock to eventually regain the positive momentum and resume the rally. As per the pattern, the price could rise to ₹2,300. Coincidentally, the chart also shows that the price band of ₹2,300-2,350 is a resistance. Therefore, ₹2,300 can be a fair target for the longs. We suggest going long at the current level of ₹1,847 and adding more shares to the holding in case price moderates further to ₹1,770. Place stop-loss at ₹1,620 first. Revise it up to ₹2,050 once the price goes above ₹2,150. Book profits at ₹2,300.
Dixon Technologies (India) (₹4,103.9)
Confirms double top
The stock of Dixon Technologies declined after failing to breach the barrier at ₹4,650. It slipped below the support at ₹4,200 last week and this happened to be the neckline of a double-top chart pattern. Thus, the short-term outlook has turned bearish and the pattern hints at a fall to ₹3,750. Yet, we expect the fall to be even much deeper wherein the scrip could touch ₹3,560 in the next two to three months. But before that, there could be a corrective bounce from here that may push the price up to ₹4,250. Therefore, traders can short the stock now at ₹4,103 and short more if it appreciates to ₹4,250. Keep initial stop-loss at ₹4,500. Move the stop-loss down to ₹4,200 when price falls below ₹3,950. On a fall to ₹3,750, liquidate one-third of the shorts and modify the stop-loss to ₹3,900. Exit the remaining at ₹3,560.
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