Buy these two stocks for medium-term gains while Nifty remains in downtrend By Subash Gangadharan Over the last few weeks, the Nifty has been in correction mode. The downtrend was confirmed when the support of 17613 was broken. On the daily chart, we see that Nifty remains in a downtrend despite the bounces seen recently. The index continues to make lower tops and lower bottoms for the last few weeks, barring the recent brief move above the swing high of 17490. The 20 day SMA also continues to trade below the 50 day SMA, indicating a negative moving average crossover. Weekly momentum readings like the 14-week RSI are in decline mode. The below picks are for the next 15-26 trading sessions Buy PI Industries PIIND has shown relative strength this week. While the Nifty index has shed 1.72% this week, PIIND has gained a healthy 5.47% over the same time period. In the process, the stock has also broken out of its recent trading range on the back of healthy volumes. Technical indicators are giving positive signals as the stock trades above the 20 day and 50 day SMA. Daily momentum indicators like the 14-day RSI too have bounced back and are in rising mode now, which augurs well for the uptrend to continue. With the intermediate technical setup looking positive, we believe the stock has the potential to move higher and take out its previous intermediate highs in the coming weeks and therefore recommend a buy between the 3060-3090 levels. CMP is 3075. Stop-loss is at 2900 while targets are at 3500. Buy Sun Pharma Sun Pharma is in an intermediate uptrend as it continues to make higher tops and higher bottoms over the last several months. After correcting recently and finding support at the 733 levels, the stock bounced back this week on the back of decent volumes. Technical indicators are giving positive signals as the stock trades above the 20 day SMA and 200 day EMA. Daily momentum indicators like the 14-day RSI too have bounced back and are in rising mode now, which augurs well for the uptrend to continue. With the intermediate technical setup looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the 770-780 levels. CMP is 777. Stop-loss is at 743 while targets are at 850. (Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)
If the current trend continues for a longer period of time, not only oil mills but oilseeds growers will also not be able to get good rates of their produce, says Samir Shah, president of Gujarat State Edible Oils and Oil Seeds Association (GEOA). Shah who is also past president of SOMA says that due to various international factors rates of edible oils had gone up considerably, especially imported oils earlier this year.
“With a view to curb rising prices of edible oil, the Government of India reduced import duty on edible oils. Considering the fact that India is producing hardly 30 percent of its edible oil requirement, the decision was right at that point of time. Now when international prices of edible oils have gone down by 15 percent to 25 percent and high production period has started in edible oil exporting countries, the government should gradually increase import duty to protect local oil mills and oilseeds growers,” said Shah. GEOA has also made representation before Union Minister for Commerce & Consumer Affairs, Piyush Goyal to increase import duty.
In June import duty on edible oils was ranging from 35 to 55 percent, since then the government gradually reduced import duty and at present it is ranging from zero percent to 15 percent on different edible oils, he said.
Just a month back prices of edible oils were through the roof and the government took appropriate measures by reducing import duty in order to protect consumers, says Atul Chaturvedi, president of Solvent Extractors Association of India (SEA). “Prices of edible oils are coming down globally. Kharif sowing has already started across the country. In the interest of local farmers, it is high time to enhance import duty in a phased manner to encourage local edible oil value chain,” opined Chaturvedi.
On Thursday imported Palm oil prices were at around Rs 2100 per 15 kg as against local Rs 2700 and Rs 2550 of groundnut and cottonseed oils. Prices of other local oils including ricebran, coconut, soyabean and mustard remained as high as Rs 2350, Rs 2520, Rs 2500 and Rs 2580 respectively.
India imports around 13-13.5 million tonnes of edible oils, of which around 8-8.5 million tonnes (around 63 per cent) are palm oil. Though the price of other imported Sunflower oil remained at around Rs 2700 per 15 kg, but import quantity of the oil is much lower than that of palm oil.