Exide Industries (₹184.25)
Confirms inverse Head & Shoulder
The stock of Exide industries rallied last week and broke out of a key hurdle at ₹178 where the 200-week moving average coincided. The breakout occurred with good volume. Besides, it has confirmed an inverse head & shoulder (H&S) pattern, indicating a bullish reversal. We expect the stock to retain the positive momentum in the coming weeks and consequently rally to ₹220 in two-three months.
Coincidentally, the H&S pattern’s indicated target is ₹220. Traders can consider buying the stock at the current level. Accumulate more shares if there is a dip in price to ₹178 so that the average price would be ₹181. Place initial stop-loss at ₹165. When the stock surpasses ₹200-mark, move the stop-loss up to ₹190. Liquidate all the longs at ₹218.
IIFL Finance (₹445.7)
Cracks a barrier
The stock of IIFL Finance, which saw its price moderate in the first week of this month, regained the bullish momentum last week as it bounced off the ₹400-level. Following this, it cracked a barrier at ₹420, which has opened the door for further appreciation. We forecast the stock to rally in the coming weeks. The nearest notable resistance is at ₹510.
That said, from the current level, the scrip could see a price dip to ₹420 before the next upswing. Given this, one can go long on the stock but in two legs. That is, buy at the current price of ₹445 and add more when there is a dip to ₹420. Thus, the average buy price would be around ₹433. Keep stop-loss at ₹395 at first and tighten it to ₹450 when price touches ₹480. Book profits at ₹510.
JB Chemicals & Pharmaceuticals (₹2,117.9)
Breaks out of range
The stock of JB Chemicals & Pharmaceuticals was trading in a range over the past few weeks. That is, it was largely fluctuating within the price range of ₹1,900 and ₹2,000. Last week, the scrip broke out, and this is anticipated to give considerable traction for the bulls, going ahead. Although there is a chance for the contract to see a corrective decline to ₹1,900, we expect the stock to regain the momentum and appreciate to ₹2,400 over the medium term.
Investors can consider buying at three prices — at the current level of ₹2,118 and add more if there is a decline to ₹2,000 and to ₹1,900. Thus, the average buy price would be ₹2,006. Place initial stop-loss at ₹1,815. On a rally above ₹2,200, alter the stop-loss to ₹2,080. Move the stop-loss up to ₹2,180 when price touches ₹2,300. Exit all the longs at ₹2,390.