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Exit Hindalco on rallies: Bhambwani
Technical Analyst, Vijay Bhambwani is of the view that one should exit Hindalco Industries on rallies. It is clearly under pressure. If it does go up, then it will go up only if aluminum prices start to show strength to the international commodity markets, which is a very remote possibility.
Bhambwani told CNBC-TV18, "Hindalco is clearly under pressure. If it does go up, then it will go up only if aluminum prices start to show strength to the international commodity markets, which is a very remote possibility. But it does exist because I expect the US dollar to weaken over time and that would give a small kicker to commodity prices, that would be an ideal situation you get out of Hindalco because there is a huge amount of overhead supply at a Rs 130 to Rs 132 band and it need not really reach there for the stock price to start tumbling again, it could actually attempt to go up and then decline because of the overhead supply."
He further added, "There are also a lot of people who entered at higher levels are waiting very eagerly to get out and that is all overhead supply is all about. In case of a decline, the stock has the drawdown, which could actually take it all the way to Rs 100 or maybe even Rs 98 levels. So the risk reward ratio is certainly not biased towards a long or holding a log at towards this point, do attempt to exit on rallies."
