Hindalco Industries Ltd (NSE: HINDALCO) is an Indian aluminum and copper manufacturing company and a subsidiary of the Aditya Birla Group. Headquartered in Mumbai, Maharashtra, Hindalco is one of the world's largest aluminum rolling companies and one of the biggest producers of primary aluminum in Asia. It is the flagship company in the metals business. In India, the company’s aluminum units across the country encompass the gamut of operations from bauxite mining, alumina refining, coal mining, captive power plants, and aluminum smelting to downstream rolling, extrusions, and foils. Today, Hindalco ranks among the global aluminum majors as an integrated producer and a footprint in nine countries outside India. Hindalco’s state-of-art copper facility comprises a world-class copper smelter and a fertilizer plant along with a captive jetty. The copper smelter is among Asia's largest custom smelters at a single location.
On the technical front, HINDALCO has higher lows and lower lows on the daily charts and is currently placed below the medium-term resistance. In the recent past, after clocking the high of Rs203 level, the stock has witnessed a round of profit booking, which dragged the counter below the long-term moving average of 200-DEMA on the daily charts. At the current juncture, the stock is forming a ceiling around Rs183-185 levels on the higher side and is all set to move lower below Rs140 level. The overall chart structure of the counter looks bearish at the current levels forming higher lows and lower lows. This may trigger a fresh round of selling which may take the stock towards Rs130 level. The stock is underperforming compared to the broader markets indicating the inherent weakness in the counter and is trading well below the medium and longer-term resistance levels. On the Bollinger band (20,2), the stock price is plotting below the mean indicating the price likely to trend lower. Analyzing the recent volume price action, the volumes are significant in the recent down move indicating strong hands have started supplying the stock at current levels. On the oscillator’s side, RSI (14) is trading in the bearish zone of below 50 levels indicating the bearishness in the stock. We expect the counter to continue its underperformance in the coming trading weeks as well and may move towards Rs130 level in the short to medium term. Any upward rally towards the recent resistance levels of Rs183-185 levels may be utilized to average the positions.
Srinivas Krishnan Bobba, Deputy Manager (technical research analysis) Karvy Stockbroking Ltd