Rajesh Manial, AVP technical research (retail desk), GEPL Capital, has provided views on Wockhardt and Tata Motors, which are in the news today. The same are as under:
Wockhardt, one of the leading pharmaceutical and biotechnology companies, gained 4.6% on Thursday after it has posted a growth of 3.55 times in the net profit to Rs 4.53 billion for the second quarter of fiscal 2013.
The stock has been in a tremendous multi month uptrend since the level of 250 till the present price of almost 1700. Though the trend still remains up till the time this stock trades above the level of 1600, the upside momentum appears to be now waning as indicated by the RSI on the weekly chart. Additionally there is a likelihood that the stock is forming an Ending Diagonal since the level of 1103 and is in the finally stages of an upmove which may eventually give rise to very steep decline once the stock trades below the level of 1600. We do not recommend any fresh long positions on the stock and the existing investors are recommended to hold the stock with a strict stop loss of 1600. All bullish bests should be off once it trades below 1600 as it is likely to decline till well below 1400 level.
Tata Motors, India's largest automobile company, declined almost 2% after reporting growth of 6% in global sales to 100,660 units for October 2012.
Tata Motors appears to be correcting the entire decline from 320 till 203 and is presently quoting at 272. In the immediate term as long as the stock trades above 260 it still has the potential to test 297 which is the 78.60% Fibonacci Retracement level of the above mentioned decline from 320. Any breach of 260 would prove as an indication that the stock may slide lower to 245 and below that 230 is likely. We recommend an exit at higher levels and do not recommend any fresh long positions. Traders with existing long positions can place a stop loss of 260.
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