Borosil Renewables
This support zone is particularly important as it also coincides with the 200-day Simple Moving Average (SMA), a key technical indicator that often serves as a strong level of support.
Additionally, the Relative Strength Index (RSI) on the hourly chart is showing a bullish divergence at this support level, which is a signal that the stock may be poised for a reversal. This makes the current price levels of Rs 530-520 attractive for taking a long position.
Given these technical indicators, the stock is recommended for buying within this price range, with an upside target of 600. To manage risk effectively, it is advisable to place a stop-loss at Rs 455 on a daily closing basis.
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Gujarat Ambuja Exports (GAEL)
Over the past year, GAEL has established a robust support level within the range of Rs 130-132, undergoing multiple tests that have demonstrated its resilience in the face of downward pressure.
Recently, there has been a significant development as GAEL broke above a bearish trendline that had constrained its movement for the past 4-5 months, and notably, it has sustained this breakout. This suggests a fundamental shift in market sentiment towards the stock.
Furthermore, on the indicator front, the weekly Relative Strength Index (RSI) has surpassed its own bearish trendline, signalling bullish momentum in the short to medium term. Considering these technical indicators, we have advised traders and investors to initiate long positions in GAEL within the range of Rs 140-144.
We have set an upside target of Rs 174, indicating our bullish outlook on the stock’s potential for appreciation. To manage risk, we recommend placing a stop-loss order near Rs 126 on a daily closing basis, aiming to protect against adverse movements in the market.
Laxmi Organics
This breakout is particularly noteworthy because it has also violated a bearish trendline that has constrained the stock’s movement for nearly three years along with volume picking up. The length of time it took for this breakout to occur makes it a significant event, suggesting a potential change in the stock’s long-term trend. Additionally, the Relative Strength Index (RSI), a momentum indicator, has consistently remained above the 50 level throughout this period.
This is a sign of strength, indicating that despite the consolidation, the stock has maintained positive momentum. Considering these technical factors, we recommend taking a long position in Lxchem within the price range of Rs 298-302.
The upside target is set at Rs 340, reflecting the potential for further gains following the breakout. To manage risk effectively, a stop-loss should be placed near Rs 280 on a daily closing basis.
(Disclaimer: Jigar S Patel is a senior manager of equity research at Anand Rathi. Views expressed are his own.)
First Published: Aug 29 2024 | 6:51 AM IST
