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Ashok Leyland (₹163.65)
Hits 52-week high
The stock of Ashok Leyland rebounded from the 50-day moving average support last week at around ₹142. The rally was strong enough to lift the stock above a critical resistance at ₹150. Going ahead, it could see a corrective decline towards the resistance-turned-support level of ₹150. However, the stock will eventually resume the uptrend. Although the price band of ₹165-168 is a resistance, we expect the stock to rally past this hurdle. It can appreciate to ₹185 by this year-end.
Considering the above factors, one can initiate buys in two legs. That is, buy the stock at the current level of ₹163 and accumulate when the price dips to ₹150. So, the average buying price would be ₹157. Place initial stop-loss at ₹142. When the scrip moves above ₹175, tighten the stop-loss to ₹163. Exit at ₹185.
Biocon (₹295.6)
Marks lower low
The stock of Biocon has been in a downtrend since early 2021. The trend turned bearish after facing resistance at ₹488 in December 2020. The fall extended and consequently, the stock slipped below the support of ₹300 last week after a brief period of consolidation. This has increased the probability of a fresh decline from here. Although there is a possibility for the scrip to see a rally to ₹325, we expect it to reverse downward and continue the decline.
The price is likely to decline to ₹250 over the medium term. Considering the above factors, one can consider initiating short positions at the current level of ₹295. Add more shorts when the stock rallies to ₹325. Place initial stop-loss at ₹345. When the price drops below ₹275, shift the stop-loss down to ₹295. Liquidate all the shorts when price touches ₹250.
Karur Vysya Bank (₹68.75)
Breaches a barrier
The stock of Karur Vysya Bank, which was in a downtrend since September 2017, reversed after taking support at ₹20 in April 2020. But since March 2021, the stock was largely moving in a sideways trend. It was oscillating between ₹40 and ₹62. But it broke out of the resistance at ₹62 last week, opening the door for further appreciation. Over the medium term, it can probably rally to ₹95.
However, there could be a price correction towards ₹55 before beginning the rally to ₹95. So, one can consider going long on the stock at the current level of ₹69. Add more longs when price dips to ₹55. Keep initial stop-loss at ₹45 and tighten this to ₹70 when the scrip rallies past ₹80. Since the price band of ₹95-100 is a barrier, liquidate the longs at ₹95.
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