Shriram City Union Finance (Rs 1080.7)
The non-banking financial company Shriram City Union Finance skyrocketed 20 per cent with good volume, breaking through its key resistance at Rs 1000 in the previous week.
With this rally we believe that the stock's medium-term downtrend that commenced from February peak of Rs 1,187 has come to an end and the stock has resumed its long-term uptrend. The stock is hovering well above its 50 and 200 day moving averages.
Important resistance for the stock is positioned at Rs 1150. Strong jump above this resistance will push the stock higher to Rs 1200 or Rs 1,230. Next important resistance is at Rs 1,300.
On the other hand, a decline below its support at Rs 1,000 will test the stock's next support at around Rs 890. Further decline below Rs 890 will strengthen the downtrend and drag it down to Rs 700 in the medium-term.
JSW Steel (Rs 741.2)
The stock zoomed 17 per cent accompanied by good volume, extending its gains in the last week. It had reversed direction taking support at around Rs 500 in mid-August 2013. Since then, it has been on a short-term uptrend. However, the stock is encountering significant long-term resistance at Rs 730 and is testing it.
The stock's daily indicators are hovering in the overbought level and it has breached the upper boundary of Bollinger Bands signalling overbought. Hence, we don’t rule out a near-term corrective decline to Rs 700 or to Rs 675.
The stock has key long-term support at Rs 600. Fall below this level will pull the stock down to its next important base at Rs 500 in the medium-term.
An emphatic break out of resistance at Rs 730 will pave way for an up move to Rs 800 and then to Rs 855 and Rs 875 band in the ensuing months.
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