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After the company's announcement of lower-than-expected first quarter results, its stock price plunged 14 per cent, emphatically breaking through its long-term support level at Rs 240 on June 19. The stock tumbled another 14 per cent in the subsequent trading session and finished the week with an overall decline of 25 per cent. There also was an increase in volume traded over the past four sessions.
The stock is currently testing its key long-term support at around Rs 180. Further, its daily indicators have reached oversold levels. The stock has breached the lower band of its daily as well as weekly Bollinger Bands. This also signals that it is oversold. Therefore a corrective rally is possible, in which case it can encounter resistance at Rs 195 or Rs 210 in the near term. Next significant resistance is at Rs 240.
The stock has been on an intermediate-term downtrend since its all-time high of Rs 349 recorded in December 2010. Strong declines below Rs 171 will however signal the resumption of this downtrend and pull the stock down to Rs 150 in the medium term.
Praj Industries (Rs 93.6)
The stock sky-rocketed more than 16 per cent on Friday following the better-than-expected Q1 results announcement. This surge has given a conclusive break-out for the stock, which was consolidating sideways in the broad range between Rs 65 and Rs 85 from May 2010. There is an increase in daily volumes over the past three trading sessions. The stock's current rally can encounter hurdle at its immediate key long-term resistance, pegged at Rs 100. Failure to surpass this level can pull the stock down to Rs 88 or Rs 85. Important support below this level is at Rs 74.
On the other hand, a decisive move above Rs 100 can lift the stock higher to Rs 110, which is the next key long-term resistance, and then to Rs 116 in the medium term
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