Today’s pick is EICHERMOT [stockquote]EICHERMOT[/stockquote]. The stock has been on an uptrend throughout the year with a 2 month correction period during the middle. The stock experienced its 52-week high of Rs. 3,000 a week ago and is undergoing consolidation currently. In the last three months, the stock has moved +25% vs. +5% of the Nifty’s.
Oscillators RSI and CMO are in no man’s land and are not signaling any directional move. Short-term technical just saw a 9×4 bearish cross-over combined with a bearish Gravestone doji.
The MACD line is moving close to the signal line and the dropping histogram levels are suggesting a bearish outlook. The long-term GMMA lines are well dispersed and are suggesting a long term bullish move for the scrip. Also, the stock just saw a close below the center line of Bollinger band, which is short-term bullish.
EICHERMOT’s average correlation with the Nifty is 0.42, which is positive. The scrip will be replicating the movement of Nifty. [stockquote]NIFTYBEES[/stockquote]
EICHERMOT has a historical volatility in the range of 0.3 to 0.8. The scrip’s volatility currently is in the middle of the range.
Given these technicals, we suggest a short-term Hold and a long-term Buy for the script. We suggest traders to use trailing stop-losses in order to book profits if a trend-reversal were to take place.
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