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Cummins India (₹1,549.9)
On a strong base
The stock of Cummins India has been depreciating over the past month. Yet, the overall trend remains bullish. Price corrections like the recent one in the past have only invited fresh buyers to helpthe stock establish another leg of uptrend. We expect the stock to repeat the same as it is now nearing a support at ₹1,520. Moreover, a long-term trendline support also coincides at this level, making it a strong base.
Thus, we might see the stock resume its rally in the coming weeks. It is likely to revisit the ₹1,700-mark in the short term. Therefore, traders can initiate long positions at the current level of ₹1,550. Add more longs if the price moderates to ₹1,520. Place stop-loss at ₹1,470. Modify the stop-loss to ₹1,590 when the stock moves past ₹1,650. Exit at ₹1,690.
HDFC (₹2,787.8)
Range breakout
The stock of Housing Development Finance Corporation (HDFC) bounced off the support at ₹2,050 in June last year. However, after rallying to the resistance at ₹2,730 in November, the stock lost momentum. It then started to consolidate, largely oscillating between ₹2,570 and ₹2,730. But last week, the stock broke out of the range. This has significantly increased the probability of it moving up to ₹3,000 in a couple of months.
So, traders can consider buying the stock of HDFC at the current level of ₹2,788. Add more longs if the price declines to ₹2,650. Place initial stop-loss at ₹2,580. When the stock rises to ₹2,900, tighten the stop-loss to ₹2,830. Liquidate the longs at ₹2,990.
Tata Motors (₹469.6)
Confirms triangle pattern
The stock of Tata Motors extended the rally last week and posted its third consecutive weekly gain. This shows good positive momentum, and the price action hints at more rally from here. In addition, Tata Motors, with last week’s rally, has confirmed a triangle pattern – a bullish indication.
According to the pattern, the stock is likely to appreciate to ₹600. Although there is a resistance at ₹530, it is less unlikely to stop the bulls. So, we recommend buying shares of Tata Motors at the current level of ₹470. Add more shares if the price dips to ₹430. Place stop-loss at ₹370 at first. Revise it up to ₹470 when the stock surpasses ₹500. Tighten it further to ₹495 when price goes above ₹550. Book profits at ₹590.
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