Cement Stocks On The Move

JC Parets
December 31, 2020

Nifty Infra is pushing up against its long-term resistance. While the index has halted at these levels before, current market rally may lead to a breakout soon, going by the bullish momentum we're seeing in the index.

We've been tracking the cement space, and while earlier there were limited actionable trades, recent buying interest grabbed our attention again. We decided to dig a little deeper and found some actionable ideas.

Let’s take a look at this space and see what the charts have to say.

Nifty Infrastructure is taking another shot at its long-term resistance. With RSI alluding to bullish momentum and price moving higher, we could witness a good move in this sector going forward.

Click on chart to enlarge view.

Since we wanted to focus on Cement stocks, we created an equally weighted custom index dedicated to this space- ASC Cement Index. The custom index has taken support from a level with a lot of price memory and bounced back. This bodes well for the index constituents.

Relative to Nifty Infra as well, the custom index is holding above its two-year support.

Now let’s take a look at some actionable ideas at current levels that look attractive on the long side for the next few weeks and months.

First up on our list is UltraTech Cement. Price has consolidated above its all-time highs with RSI indicating strong bullish momentum and 200-DMA inching higher, indicating growing strength. We are bullish with a risk management level of 4,960 for a target of 6,025.

Next, we have Heidelberg Cement which is trading at all-time highs. Price broke out of a resistance that has been tested several times over the past year and a half. We are bullish above 215, with a target of 270.

India Cements has witnessed a sharp recovery from its March lows. Momentum is in a bullish regime and could take price towards 220 in the weeks and months ahead. Our risk management level is 158.

Grasim Industries is something we'd like to keep on our radar. As can be seen, 950 is a level that has been tested several times. And what we've learned is, the more number of times a level is tested, the greater is the likelihood of a breakout.

Is the positive slope of the 200-DMA giving us that early indication? We'll just have to wait and watch. We are positive above 950, for a target of 1290.

Shree Cement is another stock on our radar. The stock is pushing up above its all-time highs. 200-DMA is sloping upwards and the secular bull market trend bodes well for the price to participate in the rally. We would like to be long above 25,100 for a target of 32,480.

The last stock on our radar is JK Cement. Stock is in a positive trend and is hovering at its breakout level of 1915. With price making higher highs and higher lows and the 200-DMA sloping upwards, we can expect another leg of rally going forward. We are bullish above 1915, for a target of 2680.

The Cement space is looking interesting at current levels with more stocks participating in the rally. Nifty Infra has made relative highs over the last couple of months but is yet to break above its crucial resistance as discussed in our December monthly conference call.

With the market continuing its rally into the new year, sectors at crucial levels could witness a move in the positive direction.

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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