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Research
Allsec Technologies Ltd - Technical Outlook - HDFC Securities
Posted On : 2013-01-05 23:45:19( TIMEZONE : IST )
This stock has been in an excellent up run over the last few months, which is evident from the weekly timeframe chart.
The upside rebound, which has occurred from the bottom of around Rs.10 during May 2012, has resulted in an approximately 500% growth in the stock price in a span of 6 months. We also observe that during the bull market run of this stock, the profit booking was minimal, which is displaying strength of the underlying stock trend.
Currently the stock price has crossed above the resistance of previous multiple highs around Rs.55.60 (brown horizontal line) and currently is consolidating around the previous upside broken resistance area (as per the concept of change in polarity) near Rs.55.60 levels.
Weekly momentum oscillator like RSI is near the overbought region of around 75 levels, which is signaling strength of upside momentum of the underlying. Current formation of divergence of the stock price over the momentum indicator is hinting a possible consolidation or cooling off could take place in near term.
The stock witnessing sharp intermediate uptrend and moving in a sequence of higher tops and a bottom during its uptrend is a sign of strength of the uptrend and this is considered as a trend continuation pattern.
The stock price witnessing minor consolidation or minor weakness after a high formation is reflecting strength of bulls to defend the stock and also push it further high. As it happened previously, this stock is expected to continue its upward journey after showing minor consolidation at the higher levels.
Since this stock has moved above the hurdles of around Rs.55.60 levels (previous multiple high area), one may expect current consolidation might take support of previous broken area during its consolidation periods.
Divergences normally occur during bull markets and they are indicative of the cooling off or consolidation of the stock price at higher levels. With positive technical outlook, one may look to go for fresh buy in this stock at CMP Rs.63.85 and add more on dips around Rs.53.60, for the upside targets of around Rs.93.00 and later Rs.114.00, over the period of 1-2 quarters. Place a stoploss of Rs.50.00 as on weekly closing basis.
