Stock of the week - National Aluminium Company Limited For Target Rs.120 By GEPL Capital
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National Aluminium Company
Observation
* On the monthly chart, we can see that NATIONALUM has been forming a higher high higher low pattern since November 2020.
* In the week that passed by, the prices broke and closed above the previous swing high of 82.10 levels, looking at the price action we can consider this to be a text book A-B-C pattern breakout with volume confirmation.
* We have seen that the Bollinger bands on the weekly time frame, the prices moving between the upper Bollinger band and the 20 Week SMA, indicating that the higher volatility on the positive side for the medium term.
* On the indicator front, RSI plotted on the weekly time frame broke above the 50 mark on Nov 2020 and has remained above the 50 mark ever since. Currently it can be seen moving between the 80 and the 60 mark as the prices form a higher high higher low pattern, indicating that the bulls are in control of the trend. The ADX line plotted in the weekly time frame can be seen rising indicating presence of strength in the up move.
* Going ahead the 98 (October 2017 high) will act as a resistance level, if this level is breached we can expect the prices to test 120 (March 2011 high).
* Our bullish view will be negated if the prices move below the 78.45 (Weekly low)., if the prices sustain below the 78.45 mark we can expect the prices to move lower towards the 65.05 (Swing low).
Inference & Expectations
* NATIONALUM has been in a long term bullish phase.
* On the medium term charts we can see witnessing a A-B-C pattern breakout, with good volume built-up.
* We expect the bullish momentum to take the prices higher towards the 98 mark immediately.
* If the level of 98 is breached we can expect the prices to move higher towards the 120 mark.
* Our bullish view will be negated if the prices breach below the 78 mark beyond which we can expect the prices to move lower towards the 65 mark.
* One can Buy NATIOANLUM at current levels for the target of 98 and 120 levels with a strict stop loss of 78. on closing basis.
Buy National Aluminium Company Limited LTP 85.35 TGT 120 SL 78
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