Pidilite Industries

Investors with medium-term investment perspective can consider buying the stock of Pidilite Industries (Rs 122.7). After finding significant support at Rs 40 in March 2009, the stock started rising. Since then, the stock has been forming higher peaks and higher troughs.



In early March 2010, the stock emphatically penetrated a long-term key resistance level. Subsequently, it consolidated sideways forming a symmetric triangle pattern, which acts as a bullish continuation pattern in this stock.

Last week, the stock broke out of this pattern by gaining almost 9 per cent. We notice that there is an increase in volume over the past three trading sessions, backing the stock's rally.

The stock is trading well above its 21- and 50-day moving averages.

The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has re-entered the bullish zone.

Daily and weekly price rates of change indicators are featuring in the positive territory. This implies reinforced buying interest. Besides, the intermediate-term uptrend-line of the stock is also intact.

We are bullish on the stock from a medium-term horizon. We believe that it has the potential to head higher to our price target of Rs 147 in the forthcoming weeks, following a minor pause around Rs 132.

Investors with medium-term perspective can buy the stock while maintaining stop-loss at Rs 108. Traders with short-term perspective can buy with target of Rs 132 and with the stop-loss of Rs 116.

Follow up – Lanco

Infratech (Rs 67)

Following an initial gain of 3.7 per cent on Monday, the stock moved sideways and ended with 2 per cent loss for the week. We reiterate our positive medium-term outlook on the stock. Investors with medium-term perspective can hold the stock with stop-loss at Rs 76 and target of Rs 83. Short-term traders can avoid trading in the stock.

via BL