Way2Wealths special report on Chennai Petroleum Corporation Chennai Petro has been an underperformer since last 4 years as the stock kept on declining from 290 levels to the recent low of 52 (For see the monthly chart check the pdf). Very soon after that, we observed a fearless recovery in the counter and the stock is now hovering near the 100 mark. During the process, the stock has confirmed ‘Higher Highs and Higher Lows’ on the monthly chart which signals change of medium to long term trend. In addition, recently we observed a breakout from the falling trend line on the monthly chart with sudden spikes in volumes. Now the immediate resistance for the counter is placed at 114 level. A sustainable move above the same will result in a breakout from ‘Bullish Flag’ pattern along with the positive crossovers of ‘5 & 20 months EMA’. This might result in a very strong upside in the coming months. Observing the weekly chart it can be seen that the stock has recently started trading above the ’89 – Weeks EMA’ after December 2010 which reflects absolute sign of strength in the counter. Now the placement of momentum oscillators in the weekly and monthly charts depicts that the counter has been keenly waiting since long time for some fresh trigger (breakout from 114 could be the one) to show an astonishing move on the upside. Therefore on the whole the mentioned technical evidences signifies that the stock is poised for a strong upside in the coming few months. However, due to the ongoing volatile conditions of the markets we advise positional traders to go partially long in the counter ONLY above 114 level. In case of any dip then after, investors can further add positions near 100 mark. The overall upside target for the counter will be 160. The stop loss for the trade set up should be placed below 91 levels. Investment Strategy: Buy 50% ONLY above 114 and then Buy balance 50% position in case of any dip towards 100 with a stop loss of 91 for a Target of 160 Risk/return ratio: 1:3 (Average buying price taken as (114+100)/2, I.e. 107) For all recomme Read more at: moneycontrol/news/recommendations/buy-chennai-petroleum-targetrs-160-way2wealth_1189551.html?utm_source=IW_DATA_stockpage
Posted on: Tue, 07 Oct 2014 08:29:42 +0000
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