Multibagger ideas: Top picks that can give 13-16% in 3 weeks

MUMBAI: Shares of major cement companies such as ACC, Grasim and Ambuja Cements have bounced back after hitting one-month lows one week ago. According to analysts, the worst is behind for the cement industry and a gradual and consistent improvement in capacity utilisation and operating performance is impending.

Manav Chopra, Technical Research Analyst, Nirmal Bang, is bullish on the frontline stocks in the sector. He expects the trio can give returns between 13 and 16 per cent in the next 2-3 weeks’ time.

1) ACC Ltd: The stock has taken support at the rising channel and has exceeded the falling resistance line drawn from the Aug’12 highs. The RSI indicator has formed a positive reversal pattern and is above the bullish support range.

The short-term trends have turned positive and indicate the resumption of the original trend. The RSC ratio has been forming a series of higher highs and lows, which is bullish and is trading above its short term averages.

He recommends buying the stock at Rs 1,345 for targets of Rs 1,460-1,490-1,520. Traders are advised to keep a stoploss of Rs 1,290.

2) Ambuja Cements Ltd: The stock has taken support at the rising channel drawn from the July’12 low and has formed a Bullish Belt hold pattern. The RSI indicator has formed a positive reversal pattern in the absence of negative divergence and is above the bullish support range.

The counter has managed to exceed above the short term falling resistance line indicating a short-term trend reversal. The RSC ratio has been forming a series of higher highs and lows, which is a bullish sign.

The stock can be bought at Rs 189.80 for targets of Rs 207-215-220. Keep a stoploss of Rs 181.

3) Grasim Ltd: The stock has taken support at the rising channel drawn from the May’12 low along with the 20 sma and has formed a Bullish hammer pattern which further validates the support.

The counter in past after taking support at rising trend line has often rallied and recently prices have managed to exceed above the short term falling resistance line indicating the resumption of the original trend.

The RSI indicator has formed a positive reversal pattern and is above the bullish support range indicating a potential for a new high.

Traders can buy the stock at Rs 2,981 with a stoploss of Rs 2,870 for targets of Rs 3,235-3,375.

Disclaimer:

The above report is based on market buzz and information given by dealers. Above-mentioned analyst may have positions in the stocks recommended. Please consult your financial advisor before taking any position in the stocks.