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Technical Observations

* Chemical stocks continues to remain in strong up trend and is seen resuming fresh up move after one month of breather. The share price of Rallies India has witnessed a strong rebound after a higher base formation above the 50 days EMA and the previous major breakout area as can be seen in the adjacent chart signalling resilience and offers fresh entry opportunity.

* We expect the stock to maintain positive bias and head towards | 370 levels being the 123.6% external retracement of its previous decline (|362-313) placed around | 370 levels

* The stock has already taken 19 sessions to retrace just 80% of its preceding 17 sessions up move (| 299-362). A shallow retracement signals a robust price structure and a higher base formation

* Among the oscillators the daily 14 periods RSI has recently generated a buy signal moving above its nine periods average thus supports the positive bias

Buy Rallis India Ltd @ 330.00-338.00 TGT 365 SL 317

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