The previous week has been very volatile for the NIFTY as the benchmark index remains in the middle of the 150-point turbulent zone of 10600-10750. Two stocks, The Indian Hotels Company Ltd., and Hathway Cable & Datacom Ltd look interesting on the Charts.
The Indian Hotels Company Ltd. (INDHOTEL.IN)
The stock marked a high of 160.45 in early 2018 and, since then, has traded in a broad range. After marking a lower high at 155.50 in April 2018, the stock has remained in a corrective downward sloping channel while making intermittent failed attempts to break out from that channel. After taking multiple supports in the 122 to 124 range, the stock has shown some signs of resumption of up move in the price over coming days.
The stock price has closed above the upper Bollinger Band. This, combined with the steep uptrend, suggests that the upward trend in prices has a good chance of continuing. The RS Line has reversed its trajectory and has been rising over past couple of weeks, indicating strong relative out-performance against the broader markets. The RS Line has also crossed its 50-DMA.
PPO remains positive on the Daily Charts and has just turned positive on the weekly charts. Weekly MACD has shown a positive crossover and is bullish while trading above its signal line. RSI has marked a fresh 14-period high and it is bullish; it is also breaking out of a pattern and moving higher. The stock has penetrated its 200-DMA, which is presently at 132.66 after remaining in a congestion zone just below it.
If there is an up move in prices on the expected lines, the stock can potentially return ~13.50% from present level of 135.70. Any move below 125 will be negative for the stock.
Hathway Cable & Datacom Ltd (HATHWAY.IN)
This media stock has started to out-perform the broader markets over the past couple of weeks but, in the last several days, has been witnessing periods of extremely low volatility.
The stock price of HATHWAY.IN has closed outside the upper Bollinger band. This, combined with the steep uptrend, suggests that the upward trend in prices has a good chance of continuing. Though there are chances of some temporary pullback inside the band, it is extremely important to note that the Bollinger bands are presently over 90% narrower than normal. The narrow width of the bands suggests low volatility as compared to HATHWAY CABLE & DATACOM's normal range. Therefore, the probability of volatility increasing with a sharp price move has increased for the near-term. The probability of a significant price move increases the longer the bands remain in this narrow range.
Weekly PPO remains positive; weekly MACD is bullish and in continuing buy mode. There is a possibility that the stock may see some volatile moves in the 29 to 30.55 range, but is likely to resume its uptrend. RSI has marked a fresh 14-period high, which is bullish. HATHWAY remains in the leading quadrant on the Relative Rotation Graph (RRG) when bench-marked against broader CNX500 Index and CNXMEDIA (Nifty Media Index). Any move below 27.50 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.
