HDFC Life (₹604.7)

Breaks out of range

The stock of HDFC Life Insurance Company, which depreciated between September 2021 and March 2022, lost momentum and entered into a consolidation phase. Since then, the stock was largely oscillating between ₹520 and ₹590. A fortnight ago, the scrip broke out of this range. Although there was a minor correction last week, the price action hints at a rally. Bulls have the potential to lift the stock to ₹725 in the next three months. But there is a chance for the stock to see a minor dip to ₹580 before crossing above ₹650.

Considering these factors, one can initiate fresh longs at the current levels. Buy more when price drops to ₹580. Keep the stop-loss at ₹550 at first. Revise the stop-loss up to ₹630 when price goes above ₹660. Thereafter, when the stock rises beyond ₹700, modify the stop-loss to ₹680. Exit at ₹725.

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MCX (₹1,604.15)

Forms higher base

The stock of Multi Commodity Exchange of India (MCX) was charting a horizontal trend between February and October last year. It was fluctuating between ₹1,160 and ₹1,430 then. While it broke out of the range in the final week of October and rallied, the price has witnessed a correction recently. However, a rebound from the support at ₹1,430 last week has brought back the bullish momentum. Until this support stays valid, the bias will be bullish.

We forecast the stock to hit ₹2,000 in the first half of this year. Therefore, buy the stock at the current level. Add more shares if there is a decline to ₹1,500. Place initial stop-loss at ₹1,340. Alter the stop-loss to ₹1,600 when the stock appreciates to ₹1,700. When price touches ₹1,820, revise the stop-loss to ₹1,720. Book profits at ₹2,000.

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UltraTech Cement (₹7,252.65)

Inverted H&S

The stock of UltraTech Cement, which broke out of a resistance at ₹6,830 towards the end of November last year, could not produce a strong follow-through up move. However, it did not fall either and remained above the resistance-turned-support level of ₹6,830. By breaking out of ₹6,830, the stock has confirmed an inverted head and shoulder pattern.

According to this pattern, the price could zoom to ₹8,500. While the pattern may not be theoretically perfect, the psychology behind such a pattern shows more upside potential. Therefore, one can buy now and add more shares if the price dips to ₹6,900. Place initial stop-loss at ₹6,615. Revise it up to ₹7,350 when the stock touches ₹7,650. Further, on a breakout of ₹7,800, tighten the stop-loss to ₹7,600. Liquidate the longs at ₹8,000.

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