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You are here : IndiaNotes >> Research & Analysis >> Companies >> JK Tyre & Industries Ltd. >> Research

Technical Stock Pick: Buy JK Tyre & Industries

HDFC Sec | 11 Jan, 2017  | Follow Author | Add to my Favourites 
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Observations:


After falling from a high of 161 (Touched in October 2016), JK Tyre found support around the 106 levels which also roughly corresponds to the 50-Week Simple Moving Average.


The stock has been steadily rising in the last few weeks and making higher tops and higher bottoms in the process. Today, the stock broke out of the 114-120 range that the stock was trading within for the last one week on the back of above average volumes.


Technical indicators are currently giving positive signals as the stock trades above the short term (13 day SMA), medium term (50 day SMA) and long term (200 day SMA) moving averages. Momentum indicators like the 14-day RSI are in rising mode and not yet overbought. The 14-day RSI also trades above its 9-day EMA, which is a positive signal.


While the stock is yet to enter into an intermediate uptrend (This would be confirmed on a move above 124), with other tyre stocks like MRF, Apollo Tyre, Ceat also moving higher, we believe that it is only a matter of time before JK Tyre enters into an intermediate uptrend.


Recommendation: HDFC Securities recommends investors to buy JK Tyre between Rs117 and Rs121.5 for targets of Rs130/145/160 with a stop loss placed at Rs110 in 1-3 months.



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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.




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