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You are here : IndiaNotes >> Research & Analysis >> Companies >> Trent Ltd. >> Research

Technical Stock Pick: Buy Trent

HDFC Sec | 16 Jan, 2017  | Follow Author | Add to my Favourites 
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Observations:


After falling from a high of 250 (Touched in September 2016), Trent found support around the 175 levels which also roughly corresponds to previous intermediate highs of the stock. This indicates the change in polarity principle is in work now. Previous major resistances are now acting as supports (See the red horizontal line in the chart above).


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 recent intermediate high of 211 on the back of above average volumes. This suggests a reversal of the recent intermediate downtrend, which is encouraging (See the chart above).


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.


We believe the stock has the potential to move higher in the coming weeks and months as it attempts to test its previous intermediate highs of 250. We therefore recommend a buy at CMP and adding more on dips.


Recommendation:
HDFC Securities recommends investors to buy Trent between Rs206 and Rs216 for targets of Rs230/257 with a stop loss placed at Rs194 in 1-3 months.



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HDFC Securities a trusted financial service provider promoted by HDFC Bank and JP Morgan Partners and their associates, is a leading stock broking company in the country, serving a diverse customer base of institutional and retail investors. HDFCsec.com provides investors a robust platform to trade in Equities in NSE and BSE , and derivatives in NSE. Our website will support you with the highest standards of service, convenience and hassle-free trading tools.


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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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