GNFC

Investors with medium-term perspective can consider investing in the stock of Gujarat Narmada Valley Fertilizers Company (Rs 114.2). In late 2008, the stock found support at Rs 50 and started to trend upwards.

While trending upward, the stock emphatically penetrated key resistances at Rs 80, Rs 90 and Rs 105. However, after recording a 52-week high at Rs 135 in January 2010, the stock had been on a medium-term downtrend until it found support at Rs 105 in late May this year.



The 200-day moving average, which was poised around Rs 105, also provided support for the stock. It appears to have resumed its long-term uptrend following a 4 per cent surge accompanied with heavy volume on Friday.

This move has helped breach its 50-day moving average.

The 14-day relative strength index has entered in to the bullish zone from the neutral region and weekly RSI is heading towards this zone. Buy signal in the daily moving average convergence divergence and price rate of change oscillator featuring in the positive territory implies that the stock's short-term up move can sustain. The stock's intermediate-term up trend-line is also intact.

Our medium-term outlook on the stock is positive. We believe that the stock has the potential to climb higher to our price target of Rs 136 in the upcoming weeks. A minor pause is however possible around Rs 125.

Investors with medium-term perspective can buy the stock while maintaining stop-loss at Rs 102. Short-term traders can buy with target of Rs 125 and with stop-loss of Rs 108.

Follow up - Pidilite Industries (Rs 128.4)

As anticipated the stock rallied last week and achieved our short-term price target of Rs 132. The stock ended the week with 4.6 per cent gains. We re-affirm our bullish medium-term outlook on the stock. Investors with medium-term perspective can hold the stock with stop-loss at Rs 108 and target of Rs 147.

via BL