Buy Maharashtra Seamless, target Rs 548: Dharmesh Shah

We believe the sideways consolidation over the past three months has laid the foundation for the next leg of up move within a structural uptrend…

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Maharashtra Seamless witnessed a structural turnaround in the August 2017 as it registered a resolute breakout from multiyear (7 years) resistance zone (Rs 420). Thereafter, the stock has consistently moved northwards and recorded a 52-week high of Rs 552.

We believe the sideways consolidation over the past three months has laid the foundation for the next leg of up move within a structural uptrend.

The entire corrective decline since January 2018 high (Rs 552) appears to be forming a falling wedge pattern. The occurrence of falling wedge pattern near crucial support area signifies bullish trend reversal.

Thereby offering a fresh entry opportunity as a breakout from falling wedge would indicate the end of the secondary corrective phase and resumption of the primary uptrend.

We believe the stock has been forming a strong support base formation around Rs 415 levels, as it is a confluence of:

a) 38.2 percent retracement of 2016-17 move (213 – 552), placed around Rs 415

b) as per change of polarity concept, the earlier resistance of Rs 420 has now acted as key support, as the stock is forming potential double bottom formation near Rs 420 levels

Based on the aforementioned technical parameter, we expect the stock to head towards Rs 550 as it is the implicated target of recent consolidation (485-415=70) added to breakout level (485+70=555) corroborating 52-week high of Rs 552.

Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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