Sizzling Stocks: Gitanjali Gems, Indian Bank :: Business Line

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Gitanjali Gems (Rs 585.3)

Gitanjali Gems skyrocketed 14.5 per cent accompanied by good volume in the previous week. After registering a new high at Rs 607.9 on January 2, the stock is testing resistance at Rs 600.

The stock has been in a long-term uptrend since early 2009 low at around Rs 33. Medium as well as short-term trends are also up.

The stock's daily as well as weekly relative strength indices are hovering above 70 levels, implying that the stock is trading at overbought levels.

Further, the stock price trading at the upper boundary of the daily and weekly Bollinger Bands indicates overbought position.

Investors sitting on profits can consider taking partial profits off the table at this juncture.

A downward reversal from the aforesaid resistance will pull the stock down to Rs 534 and then to Rs 500. A strong decline below Rs 500 is required to signal bearishness and the stock can decline further down to Rs 465 or Rs 450 levels.

The long-term uptrend remains in place as long as the stock trades above its significant long-term support at Rs 365 levels. Strong rally above Rs 600 will pave way for a move to Rs 650 or to Rs 700 in the long-term.

Indian Bank (Rs 215.2)

The stock conclusively broke out of a key long-term resistance at Rs 195 by gaining almost 11 per cent last week. With this rally, the stock appears to have resumed its medium-term uptrend that has been in place since September 2012 low of Rs 152. Short-term trend is also up. But the stock is facing another important resistance at Rs 220.

The stock's daily indicators are hovering at overbought levels signalling a near-term corrective decline is on the cards.

However, medium-term uptrend looks promising and resumption of this uptrend will take the stock higher to Rs 233 and then to Rs 250 levels in the medium-term.

Short-term supports are pegged in the Rs 195 and Rs 200 band and next at Rs 185. Strong decline below Rs 185 will mar the stock's medium-term uptrend and pull it down to Rs 170 or Rs 165 in the medium-term.