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CARE Ratings (₹1,106.1)
Potential bullish reversal
The stock of CARE Ratings has been moving in a sideways pattern for over two months. It was held between ₹960 and ₹1,040. But last week, the scrip broke out of the resistance at ₹1,040, potentially ending the correction phase. Going forward, we expect the stock to appreciate. The chart shows a potential to rally to ₹1,700 in the medium term.
That said, there is a chance for the price to drop to ₹1,020 before the next upswing. So, buy now and accumulate on a dip to ₹1,020. Keep a stop-loss at ₹850. When the price hits ₹1,300, trail the stop-loss to ₹1,100. On further upside to ₹1,500 exit half of the longs and then revise the stop-loss to ₹1,300. Liquidate the remaining positions at ₹1,700.
EIH (₹391)
Chart indicates accumulation
The stock of EIH has been charting a sideways trend for nearly two months. It has been fluctuating between ₹360 and ₹400 since mid-August. That said, the chart shows that ₹360 is a support where the 50-week moving average coincides. This is a strong base and a decline below this level is less likely. We expect the stock to breach ₹400 soon and move up to ₹500 over the next few months.
Therefore, traders can consider buying this stock at the current level and accumulate if the price dips to ₹370. Place stop-loss at ₹340. When the price rises to ₹440, modify the stop-loss to ₹400. Revise the stop-loss further up to ₹450 when the stock reaches ₹475. Book profits at ₹500.
Samvardhana Motherson International (₹200.85)
Likely to resume the rally
The stock of Samvardhana Motherson International snapped a three-week rally by losing 6.5 per cent last week. Nevertheless, it remains above the support at ₹200. Even if the price drops below this, the downswing is not expected to extend beyond ₹185. Because the broader trend is bullish and last week’s fall is likely to be only a correction. We anticipate the scrip to end the decline and resume the rally.
The stock can rise to ₹300 in a year or so. Go long at ₹200 and buy more shares if the price dips to ₹185. Place stop-loss at ₹160. When the price rises to ₹230, alter the stop-loss to ₹200. Move the stop-loss further up to ₹250 when the stock touches ₹275. Exit at ₹300.
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