CEAT LTD: cmp 1611
The tyre stocks had been in an upswing before
the recent Trump Tariff Tantrum correction set off in markets. However after
about couple of months in that, it looks like we are all set to see new buying
and upmoves in selected sectors again. One of them seems to be tyre stocks.
They have got the push to get out of the
correction or consolidation by the falling rubber prices, the decision of
Indian government to levy import duty on rubber and the huge brand value and
investor favouritism created in tyre company such as MRF.
CEAT has been lagging in picking up with its
other peers like Apollo Tyre and MRF which are almost now making new highs.
CEAT, which also once played on the tunes of the sectoral theme with its peers
has been slow in responding the rise in the peer group stocks and still down
about 20% from its highs. One of the reason may be the not so exciting results
in the previous quarter.
However, it looks like it is consolidating and
likely to give good spurt on the upside with first target of 1700 and then
reach its old highs of 2000.
We do not look tyre stocks as commodity
business such as sugar, and all metals. Why? Because they have not behaved in
that fashion. They have more behaved like a consumer and brand businesses. So,
the point is for the medium and long term investors also this stocks are not a
threat. History has good evidence of our argument.
A delivery trader can buy in spot, or try to
trade with call options for april, or may or keep an eye to take a good entry
price and gain on an almost sureshot move on the upside.
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