This
company is one of the largest in India and third in the world for producers of
Phthalic Anhydride, which is used for the production of flexible PVC, UPR,
Plasticizers, varnish, textiles dyes, and paints. The company we are talking is
IG Petrochemicals. The company is likely to show better price
performance in near term supported by good fundamentals and technical breakout.
On chart, stock prices are volatile.
The stock hit 52-week high of Rs. 174.50 in August 2015, then price revered to
52 weeks’ low of Rs. 75.20, in the month of February 2016, down by 56.90 percent
from its 52-week high. Currently, stock price is trading at Rs. 176.85, made a
52 weeks’ high at Rs. 183.85. The stock price witnessed 135 percent rise in the
last six months, from the 52-week low. We feel that there is still some steam
left and the rally is likely to continue.
On
a different time, scale i.e. daily, weekly and monthly chart, stock price is
making higher tops and higher lows pattern and trading above 20SMA (157.26),
50SMA (156.63) and 100SMA (144.32) respectively, suggesting it has potential up
move in upcoming trading sessions, indicate positive outlook for the stock
price.
Technically
on daily chart, stock price at. Rs. 176..85 has given a breakout of rounding
pattern at Rs. 168 level, and it’s moving towards northward direction, indicate
ongoing bullish rally will continue in the stock price. Applying other indicator on the chart like Bollinger
Band (BB) we find stock price at Rs. 176.85 is
ridding the ‘Upper Bollinger Band’ and also the bands are widening, thus
indicating positive momentum.
The technical indicators
over different time scales – on a daily weekly and monthly chart – point
towards a clear relative strength index (RSI), which indicates inherent
strength. It has more room upside, which adds further positivity to the index. On
a monthly chart we spotted positive crossover in moving average convergence
divergence or MACD (a momentum and trend indicator) also suggest the formation
of the next big move up in the stock over the next few months. Most of the
oscillator based indicators also point towards the bullish view of the stock
price.
Looking towards the chart
pattern and study i.e. Bollinger Band, RSI and MACD,
we believe stock price may extend its rally towards Rs. 206/224 levels, whereas
Rs. 166 will act as a strong support level on closing basis.
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