Pick of the Month : Crompton Ltd For Target Rs. 345 - Religare Broking
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Rationale
* The stock gained nearly 5% in the previous series but added noticeable OI to the tune of 40%.
* 99% of the Open positions rolled to the next series (above par with respect to the 6-month average).
* Open Interest of 9.2k contracts as against 6.6k previously with decent cash based buying in last 5 days of series.
* With Possibly Long formation and Carry forward of these bets, Stock may scale higher.
Buy Crompton Ltd CMP 305; Range 302-306; SL 287; Target 345
Technical View
* Crompton recovered strongly from the lows (252 levels) after completion of a Bullish Harmonic Pattern with noticeable surge in volumes at the Potential Reversal Zone.
* After a decline from resistance zone of 320, it registered a breakout from the basing pattern and reclaimed its short term moving average i.e. 10 WEMA, which also coincides with the 61.8% retracement level of its prior upmove from 251 to 320.
* Following the price action and volume activity, we believe the recovery in the stock to strengthen further and thus offering fresh buying opportunity.
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SEBI Registration number is INZ000174330
