On October 30, we discussed on three stocks on NIFTY Metal Index ($CNXMETAL) that deserved our attention. This note can be found here. There was a Corporate Action yesterday, i.e. on Oct. 31, in the stock Hindustan Zinc Limited (HINDZINC.IN) that of a Dividend payout. This has resulted into adjustment of the price series. The Details of the referred Corporate Action on HINDZINC.IN can be found here.
Because of this, there is a change in levels, the expected price targets, etc. Few trend lines also got disturbed and needed to be adjusted. Note that the primary reading on the stock remains same. Please find the updated price levels below.
After marking a high of 300, the stock has been trapped under a very prolonged consolidation and a sideways move. The stock has been in a defined trading range and has formed a rectangle pattern ( a trading zone) while moving sideways for over 12 months. Couple of signals have emerged which point towards resumption of an up move over coming days.
The Relative Strength (RS) Line, when compared against both CNXMetal Index and the broader CNX500 is showing a bullish divergence against the price. The both RS Lines have broken out of a pattern. A confirmation on them is seen as the RS Lines have crossed their 50-Week MA. All this has happened while the price has still continued to remain within the rectangle pattern formation not showing any breakout.
Though PPO is still mildly negative, it is likely to turn positive going ahead. Weekly RSI, which neutral against the price showing no divergence is seen inching higher after marking higher bottoms. The stock enjoys important pattern supports in the 248-254 zones and may potentially see upside price revision of ~22% - 24% over coming weeks if these supports are not violated. Any move below 245 will be negative for the stock.
Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst
www.EquityResearch.asia
Disclosure pursuant to Clause 19 of SEBI (Research Analysts) Regulations 2014: Analyst, Family Members or his Associates holds no financial interest below 1% or higher than 1% and has not received any compensation from the Companies discussed.
