Buy Tata Chem around Rs 322-328; target Rs 370: ICICIdirect
ICICIdirect.com has come out with its report on Tata Chemicals. The research firm recommends to buy the stock in cash in the range of Rs 322-328 for the target of Rs 370 with a stop loss of Rs 302 for the time frame of 3 months, in its research report dated May 03, 2013.
ICICIdirect.com has come out with its report on Tata Chemicals. The research firm recommends to buy the stock in cash in the range of Rs 322-328 for the target of Rs 370 with a stop loss of Rs 302 for the time frame of 3 months, in its research report dated May 03, 2013.
From the middle of the April series, the Nifty has witnessed a sharp short covering trend, wherein the index marched over 8 percent from the lows. Key triggers were FIIs positions, who changed their negative stance in the index futures segment, as they did not roll their short positions into the May series. It has provided some relief to the broader market from the selling pressure, which was prevalent in the last three months. We believe, in this scenario, the midcap space could see some recovery. In this regard, stocks like Tata Chemical may see an up move on the back of prevailing low leverage and delivery based buyingThe open interest in Tata Chemicals has been on a declining trend since the stock topped out at 380 levels at the start of January 2013. This suggests that declines in the stock were on the back of long liquidation as it tanked over 20 percent in the following four months till April expiry. As the Nifty halted its fall in the middle of April, the stock also bottomed out near 310. Since then it has seen OI increasing by 17 percent (from April 15). Fresh long addition continued in the current series, suggesting long build-up resuming in the stock. However, the stock is still low on leverage, leaving room for further upsidesNoteworthy delivery based volume was seen in the middle of the April series in the region of 315-320. In the current up move, the stock has held this delivery based buying zone, which is likely to act as a key support for Tata ChemicalsSince March 2010, the stock has not dipped below the key support of 300 and has seen a bounce from these levels on numerous occasions. It is hovering near its key resistance of Rs 328, which is the 200 DMA for the stock. and is likely to see a further up move on the back of cash based buyingRecommendation: Buy Tata Chemicals in cash in the range of 322-328
Target: 370
Stop loss: 302
Time Frame: 3 monthsAlso Read - Arbitrage seen in Hindustan Unilever buyback: ICICIdirectDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 
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