ICICIdirect.com report on Sintex Industries
"Sintex Industries is one of the leading providers of plastic and textile products in India. After a prolonged period of underperformance during November 2010 to August 2013, the stock entered an uptrend from early September 2013. The stock rallied from a multi year low of Rs 16.80 in early September 2013 to a high of Rs 37 in October 2013. Thereafter the stock entered a consolidation phase to cool off the overheated conditions after the sharp sprint of over 120% in just two months. The recent developments on price front indicate an end of the consolidation phase and start of fresh up-leg and therefore offer fresh entry opportunity"
"The entire price consolidation from late October 2013 till date occurred in a well defined Symmetrical Triangle pattern on the daily chart (refer exhibit: 1). A symmetrical triangle occurs as a continuation pattern during an uptrend as bulls take a breather after a strong advance. As the pattern develops, volumes start to diminish and as the bulls overcome the period of indecision and resolve to take price further northwards it results in a breakout from the upper boundary of the triangle"
"The price upmove in Wednesday’s trade has seen the stock register a strong breakout from the upper boundary of the symmetrical triangle pattern above Rs 35. The follow through strength in today’s session has seen the stock move above its 200 day EMA currently placed at Rs 37, for the first time since January 2013 highlighting the strong bullish momentum"
"The entire price consolidation over last two months occurred on back of relatively thin volumes (50 day average volume of 50 lakh shares) while the price breakout was accompanied with thrice the 50 day average volume (1.5 cr. shares). The sharp expansion of volumes during price breakout highlights strong participation in the direction of the trend"
"Among oscillators the MACD (E-12/26/9) has sailed above its trigger line throughout the two month consolidation indicating a healthy price consolidation within an uptrend"
"The measuring implication of the price pattern i.e. the width of the Triangle’s base (Rs 37 - 27 =10) added to the breakout point of Rs 35 projects upside towards Rs 45 levels in the coming months. Therefore the stock provides good entry opportunity for short term players to ride the next up-leg"
Strategy: "Buy Sintex Industries in the range of Rs 37.00-35.00 for a target of Rs 44.00 with a stop loss below Rs 32.00 on a closing basis," says ICICIdirect.com research report.
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