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The stock zoomed 8 per cent accompanied by extraordinary volume on Friday. This rally followed the company's second quarter results announcement. It stated that net profit was up 57 per cent at Rs 554 crore as against Rs 353 crore reported in the same quarter last year. Its net interest income grew 11 per cent at Rs 1850.2 crore as against Rs 1,661 crore. From its intra-week low, the stock has gained 17 per cent, but on a weekly basis, it has increased 8 per cent. Since bottoming out from its August 2012 low of Rs 150, the stock has been on a medium-term uptrend. The stock's recent uptick has decisively breached its key resistance at Rs 213. It is hovering well above its 50- and 200-day moving averages. However, it is facing significant long-term resistance in the band between Rs 230 and Rs 240. Only a conclusive break through of this resistance band will pave way for a rally to Rs 270 and then to Rs 290 in the forthcoming months.
Inability to surpass the aforementioned resistance band will pull the stock down to Rs 213 in the short-term. Next key supports for the stock are at Rs 190 and 180. Decline below the second support will mar the stock's medium-term uptrend and pull it down to Rs 150 levels.
Marico (Rs 204.2)
It was a volatile week for Marico. After its second quarter results announcement, the stock slumped 4.5 per cent with good volumes on Friday. Though the company reported that its consolidated net profit has increased 10 per cent year-on-year, its operating profit margin and net profit margin were down. After marking an all-time high at Rs 217, the stock fell, forming a bearish engulfing candlestick pattern, implying a bearish reversal in the trend on Friday.
The reversal is also backed by a negative divergence in daily moving average convergence divergence indicator.
The stock's intermediate-term uptrend that was in place from its December 2011 low of Rs 134 is now being tested.
To reverse this trend, the stock needs to decline below Rs 175. Immediate support for the stock is at Rs 195 and a fall below this level will drag it lower to Rs 180 in the medium-term. On the other hand, important resistance is at Rs 214. Strong rally above this resistance will reinforce bullish momentum and take the stock higher to Rs 220 or Rs 230 in the medium-term.
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