Today’s pick is ATFL [stockquote]ATFL[/stockquote]. The stock started the year with a run up to Rs. 510 levels, but was struck by double top around the levels to drop to Rs. 400 by the middle of October. Since then the stock has been on an uptrend reaching its 52 weeks high of Rs. 536 in January through February. This level has been acting as a dreaded resistance for the last few months. In the last three months, the stock moved +3% Vs. -4% of the Nifty’s.
Oscillator RSI and CMO are drifting towards over-sold bounds. The stock is currently trading close to the lower edge of Bollinger bands. Short-term technical saw a 18×4 and 9×4 bearish signal a couple of days ago.
The MACD line and signal line are moving parallel to each other without giving any directional bias. Although, the Long-term GMMA lines are currently expanding, the short-term lines are giving a negative outlook for the stock.
ATFL’s average correlation with the Nifty is 0.30 which is positive but weak. The scrip will not be replicating movement of Nifty. [stockquote]NIFTYBEES[/stockquote]
ATFL has a historical volatility in the range of 0.3 to 0.8. The scrip’s volatility is currently in the lower end of the range.
Globe capital’s has a buy call based on fundamentals:
- Sundrop light will continue to drive growth;
- Strong pipeline for RTE (Ready To Eat) popcorn;
- Peanut spread can be key growth driver;
- Foray into Bangladesh;
- Expanding distribution network;
- Focussing on regular Capex;
- Increasing corn prices will not affect margins;
- Increase in stake of Conagra Food;
Given these technicals, we suggest a short-term sell. A long-term call could be taken depending on stocks price action near the resistance level of Rs. 520 levels.
