Upside target of 40-42 for Arvind Mills: Devang Visaria

ET Now spoke to Devang Visaria, Chief Strategist, devangvisaria.com, on his views on Arvind Mills.

ET Now: What is your outlook on Arvind Mills?

Devang Visaria: On the daily charts, it is forming a good inverted head and shoulder formation with a breakout placed at around 38 levels. That is still a little bit far off from this level and the stop loss for this one comes at around 33.50.

We have a very strong risk-reward ratio, considering the fact that it is a very liquid mid-cap where you can buy big quantities and sell good quantities. So we are recommending Arvind with a stop just below 33.50, first target would be the breakout level of 38 followed by upside targets of 40-42 on the higher side.

ET Now: It looks like Arvind Mills still needs to breach some resistance, perhaps another Rs. 4-5 from where it is to really make a solid upside move. Would that be correct or do you think it is already there?

Devang Visaria: No, it has to make that. What we are doing is we are trying to anticipate a build-up of the trend. Also, the fact that we are just able to play this with slightly under Rs. 2 odd stop loss, so as a trading call, you have a good risk-reward ratio, hence the reason we give this call.

But major moves will happen only when it gets past 42-43 levels, which happens to be the 52-week high for the stock because if it were to get past that, you would be able to confirm some kind of high bottom, high top formation and that would be extremely bullish for this stock.