Sizzling Stocks: Jet Airways, Oracle Financial :: Business Line

 

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Jet Airways (Rs 609.1)

 

The stock skyrocketed 15 per cent last week on expectation that Eithad Airways would pick a stake in the company. After a broad sideways consolidation between Rs 320 and Rs 400, the stock made an upward breakthrough in the third week of November 2012 by gaining almost 28 per cent. With this gain, the stock continued its intermediate-term uptrend that has been in place since December 2011 trough of Rs 167. There is an increase in weekly volume over the past four weeks. The stock has also retraced 61.8 per cent fibonacci retracement level of its prior downtrend, and it is currently testing key long-term resistance in the Rs 600-Rs 630.

The daily relative strength index is displaying negative divergence implying potential trend reversal. Further, weekly RSI is hovering in the overbought levels and the stock price has surpassed the upper line of its weekly Bollinger Band . Therefore we don’t rule out a short-term corrective decline or sideways movement in the ensuing weeks. The stock can decline to Rs 550 or to 510 levels. Next supports are positioned at Rs 475 and Rs 437. A fall below Rs 437 will negate the stock’s medium-term uptrend and pull it down to Rs 400. On the upside, a decisive breakthrough of Rs 630 will lift the stock northwards to Rs 700 and then to Rs 760 in the medium-term.

Oracle Financial Services Software (Rs 3,176.1)

The stock jumped almost 4 per cent on Friday, breaching its previous peak at Rs 3,125 levels and has marked new high at Rs 3,188. For the week, the stock gained 11 per cent with good volume. The stock has been in a long-term structural uptrend since the early 2009 low at around Rs 425. Both medium as well as short-term trends are up for the stock. In early August 2012, the stock conclusively broke out of its key long-term resistance at Rs 2,630 levels and continued to trend higher. Important long-term support is positioned at Rs 2,470. As long as the stock trades above this support level, the medium-term uptrend remains in place and the stock can trend higher to Rs 3,300 or Rs 3,400 levels in the year ahead.

However, as the stock has run up sharply and its daily indicators are hovering in the overbought levels a near-term corrective decline is possible. In that scenario, the stock can decline to Rs 3,000. Next significant support is at Rs 2,800 levels.