Sizzling Stocks: Sintex Industries, Biocon ::Business Line

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Sintex Industries (Rs 63)

Sintex Industries has been in a long-term downward ever since peaking out in November 2010. After encountering resistance at around Rs 190 this July, the stock continued its downward path and has been on an intermediate-term downtrend. Decisively breaking through its short-term support at Rs 87, the stock nose-dived 32 per cent with good volumes in the previous week. The daily and weekly relative strength indices are hovering in the oversold territory. Further, the stock has breached the lower boundary of the Bollinger Bands signalling oversold. We see that there is an increase in volumes over the past four trading sessions.

As the stock is approaching its next important long-term support at Rs 57 and its daily and weekly indicators are oversold, a reversal from the support band will lift the stock higher to Rs 69 or to Rs 87 in the short-term. However, since the long-term downtrend is still intact, an emphatic breakthrough of the support will pave way for the stock to decline to Rs 49 or even to Rs 40 in the ensuing months.

Biocon (Rs 261.2)

The stock collapsed 17 per cent in the last week, strongly breaking through its key long-term base level zone between Rs 300 and Rs 310. With this plunge, the stock has reinforced its on-going downtrend that has been in place from its October 2010 peak of Rs 464. Volumes have been increasing over the past three trading sessions.

The stock is likely to test its immediate support in the zone between Rs 245 and Rs 250. Even so, as the stock has fallen steeply and its daily indicator is featuring at the oversold levels we don't rule out a minor corrective rally to Rs 275 or Rs 290 in the short-term. Next key resistances are at Rs 310 and Rs 350. Decisive breakthrough of the aforesaid support band will pull the stock down to Rs 215 or Rs 200 in the medium-term.