Today’s pick is TATACOFFEE [stockquote]TATACOFFEE[/stockquote]. The stock has been on an up-move since the beginning of last year and it still continues. It just saw its 52-week’s high level of Rs. 1,673 a week ago. In the last three months, the stock has moved an astonishing +54% vs. +6% of the Nifty’s.
Oscillators RSI and CMO are currently in no man’s land but are seeing a bearish divergence with the price action. Short-term technical just saw a 9×4 bearish cross-over.
The MACD line has just penetrated the signal line in a bearish move for the stock. Long-term GMMA lines are well dispersed out, suggesting a bullish outlook for the scrip for longer term. However, short-term GMMA lines are starting to move towards each other giving a bearish outlook for the short term.
TATACOFFEE’s average correlation with the Nifty is 0.56 is positive and strong. The scrip will be replicating the movement of Nifty closely. [stockquote]NIFTYBEES[/stockquote]
TATACOFFEE has a historical volatility in the range of 0.4 to 1.2. The scrip’s volatility currently is in the middle of the range.
Given these technicals, we suggest a short-term Hold. Looking at the well dispersed GMMA lines and the long-term trend in place we suggest a long-term Buy for the script. . It will be beneficial to have trailing stop-losses in place, in order to book profits if a trend-reversal were to take place.
