Saturday, September 17, 2011

Buy JK Cement on declines.


We recommend a buy in the stock of J.K. Cement from a short-term perspective. It is apparent from the charts of the stock that it has been on an intermediate-term downtrend from its 52-week high of Rs 199 marked in October 2010. Further, its medium-term trend is also down since it encountered resistance at Rs 140 this April. However, the stock's decline found support at its long-term base level at around Rs 100 recently.
On Wednesday, the stock jumped eight per cent, forming a bullish engulfing candlestick pattern which signals a bullish reversal. Moreover, this up-move was triggered by a prolonged positive divergence in daily moving average convergence divergence and weekly relative strength index. We observe that there has been an increase in volumes over the past four trading sessions.
The daily RSI is inching higher in the neutral region towards the bullish zone and weekly RSI is on the brink of entering into the neutral region from the bearish zone. Taking a contrarian stance on the stock we are bullish on the stock from a short-term perspective. We anticipate the stock to move higher until it touches our price target of Rs 123.5 or Rs 127 in the approaching trading sessions.
Performance :
The scrip gave the following returns during the last 1 year 
Time SpanPriceChange%Change
Today117.351.201.03
Week115.051.100.95
Month103.3512.8012.38
Three Months106.309.859.26
Six Months133.55-17.40-13.02
One Year165.55-49.40-29.83


Recommendation :
Traders with a short-term perspective can buy the stock around 105 levels with stop-loss at Rs 95 and hold for a target price of 140 for a holding period 3-4 months.
Bought to you by

Ingenious Investor
Equity Research Division

Ravina Consulting
Pattamal Plaza
3rd Cross Kamanahalli
BANGALORE 560084

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