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Our analysts pore over technical charts to offer some smart trading tips for the short term

Author: Srinivas Krishnan Bobba/Thursday, October 15, 2020/Categories: Exclusive

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Our analysts pore over technical charts to offer some smart trading tips for the short term

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


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The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

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