Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Technical Analysis

Author: Team Karvy/Wednesday, July 20, 2016/Categories: Stocks

Technical Analysis

Tech Mahindra

Tech Mahindra, is an Indian MNC which provides networking technology solutions and BPO services. A specialist in digital transformation, consulting and business re-engineering solutions. In the recent times the company has made its presence felt in the global arena by acquiring firms and foraying into areas, in December, 2015 it acquired Pininfarina for a controlling stake. In June, 2016 it acquired The BIO Agency at a deal valued around 112 million pounds.

Points of Observation

Tech Mahindra in the recent times has started to outperform the Nifty IT index and Nifty IT heavyweights such as Infosys and Wipro from a medium to long term perspective which suggest that long term investors are bullish on the counter.

The stock is currently trading above all of its major moving averages which suggest that the stock has strength to start a fresh journey which might lead to make the stock make new highs.
The stock was consolidating in a range of 30 points spanning across 159-189 levels and gave a breakout on the charts with notable volumes and since then it has given a staggering return of around 274%.

The stock was facing a stiff resistance placed around 484 levels and was not able to surpass the said resistance level on the daily charts. The stock gave a breakout on the daily charts from the said level on account of good results declared by the company.  We recommend medium-to-long term investors to buy the stocks at current levels and accumulate the stock on dips by holding the stock with a stop loss placed around 415 levels.

ABB

ABB the parental company of ABB India is one of the global leader in power and automation technologies with an employee base of nearly 1, 40,000 and operates in approximately 100 countries. ABB India has been successfully investing and steadily expanding its manufacturing, engineering and R&D footprint. Currently it is managing the power network management for Delhi Metro and Delhi Airport; it also runs the world’s largest HVDC Project and transnational conveyor belt. The stock price has seen a rally from levels of 430 in August 2013 to the 1526 in February 2015 giving a whopping gain of more than 250%.

After clocking the said highs, the stock has been consolidating in a band of 950-1525 over last one and half year, indicating a pause in the ongoing long term up trend, and shall move into unchartered territory on breach of the current trading range. Going forward, until the stock is holding above 950-1000 levels, it has the potential to rally towards its all time highs of 1500-1550 and above it to unchartered territory in the coming months.

Points of Observation
During the current consolidation phase, the stock on weekly chart has been respecting its medium and long term moving averages and is bouncing back with decent volumes, indicating strong hands are playing in the counter. Even the trading and deliverable volumes on the down move are on the lesser side compared to the up moves in the current consolidation phase, indicating the probability of breaking the trading range on the higher side is high. 

On the Bollinger band set up on weekly charts, the bands started contracting, indicating the cooling of volatility and the volatility can expand once the stock breaches and sustains beyond the band. However we expect the stock to break on the upside of the Bollinger band and volatility to burst on the higher side.

Among oscillators on weekly charts, the 14-period RSI line is trading at a reading of 53 and MACD setup is also above the zero line and the signal line is below the MACD line, both indicating the stock has more upside and any dip in the counter can be used for fresh accumulation. 

We therefore recommend participants with a time frame of 8 to 12 months to buy the stock in the range of 1200-1220, and average on dips towards 1070-1080 for the mentioned target levels with a strict stop loss placed below the level of 990.

Coal India 

The monthly chart structure of this fundamentally strong stock, suggests formation of cycles of higher highs and higher lows, supported by consolidation in the past few months, clearly indicating there is a lot of demand for the stock even at higher levels which is a positive sign in itself. COAL INDIA is in a structural uptrend and looks well set to march steadily towards the Rs.380-400 mark over the next 9-12 months. The stock has been relentlessly rallying from its Aug, 2013 low of Rs.187.47 to a lifetime high of Rs.415.9, which was clocked in the month of August, 2015.

Points of Observation
On the weekly charts, the stock is trading above its short and long term moving averages, indicating the bullishness in the counter.On monthly charts the stock is finding support at the lower Bollinger band (20, 2, S) and stock has formed a bullish hammer on the monthly charts; coupled with tweezer bottoms formation on candlestick charts.

The stock has seen fresh accumulation in the recent past as it has witnessed a rectangle pattern and currently prices are trading above its upper resistance zone validating the breakout. 
On Elliott wave front, the stock has completed wave 4 at the lows of 266. From there the stock has seen an impulse which indicates fresh up trend has resumed after the corrective phase.
Among oscillators, the MACD is in buy mode in daily and weekly time frame indicating bullish bias. 

We therefore recommend long term investors to go long in the stock around Rs.315, and average the long position on dips, if any, around the level of Rs.300 for the above mentioned target levels with a strict stop loss placed below the level of Rs. 275 on a weekly closing basis.

Century Ply

CenturyPly is India’s leading plywood brand in the organized plywood market. The company is engaged in the manufacture of plywood, laminates, veneer, MDF, blockboards and doors.  Indian Plywood & Panel Industries market share of organized sector is around 30% and around 50% of organized market is controlled by two national players, one among them is Centuryply. Overall industry is expected to grow at 10% and organized sector is expected to grow at a faster pace of 25%-30% in next two years.  

And even GST implementation is expected to lead to a shift from the unregulated to the regulated sector, adding to the company’s prospects. Technically at current juncture stock is well poised with bullish bias, and likely to surge towards 260-300 levels over coming 4-6 months time frame.

Points of Observation
The stock made its dream-run from the low of 22 formed in mid of Feb’14 towards 262 cloaked in the month of March’15, whopping gains in period of one year. Post forming a high, stock entered into a period of price correction on account profit booking and subsequently turned sideways, wherein it retraced 50% of said rally and started recovering.   
In the mid of Feb’16 stock confirmed a double bottom formation by placing a low of 135 and witnessed smart rebound in last couple of months. From the low stock rose over 50% in near about 5 month’s time. 

Technically, stock price is well poised above its major 200-DEMA and also above its 21 & 50-DEMA, depicting underlying positive bias in the counter.  On the technical setup momentum oscillator 14-period weekly RSI is formed base above 40-level and gradually inching higher from equilibrium level, reaffirming bullish undertone. 

From the above observation, technically stock is well poised to surge higher towards its life time high of 262 and eventually in an uncharted territory over coming months. Hence, one may buy stock near 195 levels and average the stock price on any dip towards 160 levels keeping a stop loss below 135 levels, for an upside target of 260 and 300 levels over next 4-6  months time frame.

Dish TV

DISHTV is Asia’s largest Direct to Home Entertainment Company. It has earned a prestigious place of being World’s third largest DTH Company. Being the leader in DTH services, Dish TV has changed the face of Indian Television by making it possible for every customer to have access to premium quality digital entertainment. The company is also a division of Zee Entertainment Enterprises.

Points of Observation
The counter is in structural uptrend making higher highs and higher lows on the daily charts. The stock had made a spectacular run from the lower levels of 40 to all time high levels of 121.65 in just a small time frame of two years. After the said stellar rally, the counter witnessed a round of profit booking which dragged the stock towards the levels of 65. The stock later consolidated for few trading weeks forming a good base around the same and started moving higher. 


Currently, the counter is looking strong and is all set to move higher in the coming months and may test its swing high of 120-121 levels made in the month of August 2015 and also has the potential to surpass the same.

On the other hand, the counter is trading with bullish bias and is hovering in between its short & medium term moving averages. Among indicators, the 14-day RSI line is trading above the 9-day EMA signal line pointing northwards and, the MACD line is trading in the positive territory, reflecting the positive sentiment in the counter.

Considering the above data facts, we expect the stock to continue its bullish trend from current levels and may test 125-130 levels in 9-12 months time frame. Any dips towards 84 levels may be utilized for adding further with stop loss placed below 75 levels.

Print Rate this article:
No rating

Number of views (165)/Comments (0)

Administrator Account

Team Karvy

Other posts by Team Karvy
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

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.