Buy Ceat above Rs 117.5; target of Rs 152: Way2Wealth

Way2Wealth is bullish on Ceat and has recommended buy rating on the stock with a target of Rs 152 in its October 9, 2012 research report.  

“Ceat is forming a triangular pattern of which wave D up has ensued. In a triangle, the internal waves are in Fibonacci series which is well observed in the above chart of Ceat. Wave B retraced 61.8% of wave of A, wave C retraced 78.6% of wave B and the target for wave D i.e. near the downtrend line which is also 61.8% retracement level. This increases the probability of a triangle. Also, the rise from the lows of 65.90 appears to be corrective i.e W-X-Y-X-Z which further confirms the possibility of a triangle.”

“Recently, the stock has provided a breakout from an inverted head and shoulders pattern which has a conservative target of 152. Though stock is currently hovering around the neckline, the momentum indicator both on the daily as well as on the weekly charts has confirmed the breakout. It is also observed that the stock is moving in an upward sloping parallel channel and the upside target of it comes to around 152. So, interestingly the target for all the patterns coincides near 152. On the lower side, 109 i.e. the neckline support and 104 the channel support are the crucial levels to watch as if the stock breaks 104 then one should exit from long positions,” says Way2Wealth research report.

Investment Strategy:

 Buy Ceat above 117.50 target 152 stop loss 103.90.

 Risk Reward: Approximately 1:2.53 i.e. (13.6:34.5).

FIIs holding more than 30% in Indian cos

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