Pare exposures in ACC, Tata Steel

B. Krishnakumar

THE market was confined to relatively narrow range last week.

The Sensex saw some volatile movement in the previous settlement. The Sensex managed to close past the key resistance level of 4333. This has infused positive market sentiment. However, the overall market structure is still unclear. The possibility of a decline to 4000 or even 3500-3600 level is still not ruled out.

A strong up move in the next few days would be an indication of the build-up of bullish trend. A move past 4409 could eventually take the Sensex to the next target of around 4800-4900 level. As of now, existing holders could use price rally past 4409 to gradually trim exposures in index stocks.

The focus this week is on ACC, Gujarat Ambuja Cement and Tata Steel. The three stocks have seen a firm trend in the recent weeks. As these scrips have moved closer to their price target, existing holders could use further price upmoves to clip exposures while fresh buying may be avoided for the time being.

The share price of ACC (Rs 189.8) appears to be heading towards its near term price target of Rs 210-215. Existing holders could remain invested and use price up moves to book profit.

Fresh buying may not be a safe option at current levels. Aggressive traders could use price rally either to or past Rs 210 to take short positions in ACC.

As mentioned a couple of weeks ago, the Gujarat Ambuja Cement (Rs 192.4) has touched the price target of Rs 195-200. After moving to a high of Rs 198.4, the scrip has turned weak in the last couple of days in the previous settlement. The recent price uptrend has pushed the scrip to the top of the current upward cycle. Existing holders could use price rally to book profit. Fresh buying may be avoided.

The share price of Tata Steel (Rs 142.9) has been moving up in the recent weeks and has now moved closer to the target price of Rs 148-150.

Existing holders could book profit in Tata Steel. A close past Rs 150 could take the scrip to Rs 165-170 level.

Recommendation follow-up

The price action in Hindustan Petroleum (HPCL), Wartsila NSD and IPCL was not on course with expectations. The scrip touched a high of Rs 197.5 on Friday and closed a bit lower at Rs 191.4. The HPCL stock appears to be heading towards the price target of Rs 230-280 mentioned last week. Existing holders could remain invested and use price uptrend to clip exposures. Fresh buying may be deferred for the time being.

The failure to move past the key resistance level of Rs 158 (mentioned last week) has blunted the possibility of the rally up to Rs 175-180 for Wartsila NSD. Existing holders could remain invested and use price rally to pare exposures in Wartsila. Fresh buying may be avoided for the time being. Though the share price of IPCL ruled relatively weak in the previous settlement, the scrip still has the potential to move to the price target of Rs.85-90 mentioned last week. Existing holders could remain invested and use price rally to Rs 85 to lighten holdings in the stock. Again, fresh buying may be avoided for the time being in IPCL.

(Note: Recommendations in this column is based entirely on Technical Analysis of the past price behaviour of the scrip concerned. There is a risk of loss in trading.)