Accumulate CMC; target of Rs 1196: ICICIdirect
ICICIdirect.com is bullish on CMC and has recommended accumulate raiting on the stock with a target price of Rs 1196 in its September 11, 2012 research report.
September 12, 2012 / 12:34 IST
ICICIdirect.com is bullish on CMC and has recommended accumulate raiting on the stock with a target price of Rs 1196 in its September 11, 2012 research report.
“CMC has been a leading midcap player in hardware and software services like site maintenance, software development, hardware support, training, etc. In line with the entire IT pack, the stock price of CMC witnessed a multi fold rally from its 2009 lows of around Rs 120 to Rs 1374 by January 2011 before turning its tail and embarking upon a sizeable correction. After retesting its January 2011 highs in May 2011 (Rs 1395), the stock corrected to the levels of Rs 721 by October 2011 and then traded in a range Rs 1100- 750 till recently. Volumes have been tepid during this corrective period.”“Indicating improving tailwinds, the stock witnessed a significant rally in early July 2012 from Rs 822-1027 on the back of strong volumes. Subsequently, CMC ranged in a narrow price band of Rs 1010- 945 over the past seven weeks. The entire price action from the early July lows took a pictorial shape of a Bullish Pennant formation, which signals further upsides. A breakout above Rs 999 completed the pattern even as volumes have been above its five week average. According to the classic Technical theory, the price implication of a Pennant breakout is measured by adding the price range of a Flag pole to the breakout level. In this case, the range of the Flag pole (1027-822 = 187 points) added to the break out level of Rs 999 projects the price target in the vicinity of Rs 1204.” “During the recent climb, the stock price has sailed past all its medium and long term moving averages and is forming rising peaks and troughs indicating a bullish trend. Among momentum oscillators, the 14 week Relative Strength Index has reached its bullish territory indicating strength from a medium-term perspective. Accumulate CMC in a staggered manner in the range of Rs 1025-1040 for a target of Rs 1196 with a stop loss below Rs 960 on a closing basis,” says ICICIdirect.com research report.Bodies Corporate holding more than 50% in Indian cos Disclaimer: 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.To read the full report click on the attachment 
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