Power
Finance Corporation funds power projects in India. The Company serves state
power utilities, central power sector utilities, power departments, private
power sector utilities, joint sector power utilities, power equipment
manufacturers, and municipal power utilities. The company has successfully carried out developments, which is likely
to show better performance, not only supported by good fundamental but also
technical breakout. Last month company has announced its September quarter
results which was in line with street estimate. Thus,
we feel that this company is expected to provide good returns to investor
portfolio.
On chart, stock prices are volatile.
The stock made a 52-weeks’ low of Rs. 70.12 in February 2016, then price hit to
52 weeks’ high of Rs. 133.80, in the month of November 2016, up by 90 percent
from its 52-weeks’ low. Currently, stock price is trading at Rs. 132.10, near
the 52-weeks high, any trade above the same stock price can rally another 20
percent.
Taking place on
different time scale at weekly & monthly chart, stock price is making
higher tops and higher lows pattern and trading above 20DMA (121), 50DMA (121)
and 100DMA (111) respectively, suggesting it has potential up move in upcoming
trading sessions, indicate positive outlook for the stock price.
This week on a daily chart it also broken out of the
long bullish pattern of inverted head and shoulder at Rs. 127.75 level and
it’s moving towards northward direction, which will take it towards Rs. 177
level. Applying other indicator on the chart like Bollinger
Band (BB) we find stock price at. Rs. 132.10 is
trading above the upper band of BB, besides band is widening, indicating
positive momentum.
Momentum
Oscillator, MACD (Moving Average Convergence & Divergence) on a weekly
chart, is on the verge to give positive crossover, favouring the bullish view,
which could witness the Power Finance Corporation (PFC) marching higher.
The
psychological sentiment towards the stock remains positive. If one were to go
by the volume data, a higher upswing is seen on the stock price.
The
stock is also looking positive on the higher chart, which foretells well for
the long-term uptrend of the stock. We believe the stock has the potential to
move higher in the coming weeks and therefore recommend a buy at CMP and adding
more on dips.
Looking towards the chart
pattern and study i.e. Bollinger Band, RSI and MACD,
we believe stock price may extend its rally towards Rs. 170 levels, whereas Rs.
114 will act as a strong support level on a closing basis.
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