ITD Cementation India

Investors with medium-term perspective can consider purchasing the stock of ITD Cementation India (Rs 234.1). The stock, which hit a bottom, in March 2009, has been on an intermediate-term uptrend forming higher peaks and troughs.

While trending upwards, the stock penetrated key resistance at Rs 135 and Rs 180 in last May and December respectively. These levels later turned into significant supports and subsequently provided support for the stock.

The sideways consolidation between Rs 180 and Rs 245 since January appears positive for the stock. The stock's recent rally from the lower boundary of this range was accompanied by strong volumes. It is currently trading well above its 21, 50 and 200-day moving averages. The stock is currently testing the upper boundary of its consolidation range. Some volatility can be expected around this resistance.

The daily moving average convergence and divergence indicator as well as daily relative strength index are featuring in the bullish zone. The weekly RSI has emerged out of neutral region and entered in to the bullish zone, signalling signs of optimism. Moreover, the weekly MACD has crossed over implying a buy signal.

We are bullish on the stock from a medium-term perspective. We believe that it has the potential of breaching the upper boundary and trending higher to our price target of Rs 275 in the medium-term. Investors with medium-term horizon can consider utilising declines to buy the stock with stop-loss at Rs 210.

Follow up- Elecon Engineering (Rs 79.7)

Following a positive start last week, the stock started to decline, experiencing selling interest and it slipped 2.2 per cent from our recommended level. However, the stock is hovering above our short-term stop-loss. We re-affirm our medium as well as short-term bullish outlook on the stock. Investors can buy with the targets and stop-loss mentioned in our previous column.

via BL