Industrial Manufacturing Sector Looks Attractive

JC Parets
February 16, 2021

Nifty Industrial Manufacturing has been performing well and has caught our attention over the past two weeks. We selected Cummins India and Siemens Ltd. in our Trade of the Week before. But it seems like the other constituents are catching up as well.

We thought we could look at actionable ideas in this sector as several stocks are breaking out of big bases.

We created an Equally weighted custom index of the Industrial Manufacturing sector and this line chart reflects exactly what we're seeing in the individual constituents. A breakout in this index is suggesting further upside as an increasing number of stocks participate in the rally going forward.

Click on chart to enlarge view.

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, we have ABB. Price seems to be breaking out of a three-year base as momentum continues to hold up in the bullish regime. As long as the price remains above the risk management level of 1,457, we are bullish with a target near 1,912.

SKF India has had a strong few weeks, leading up to the breakout. The stock has crossed its 2020 highs and looks ready for another leg of the rally. We are bullish above 2,317, with a target near 2,990.

Supreme Industries has broken above its resistance at 1,910. The momentum indicator has remained in the upper half of the pane, indicating the inherent strength in the stock. As long as the price stays above 1,910, we can look for levels near 2,612 in the weeks and months ahead.

Timken India is moving higher post breaching the 161.8% Fibonacci retracement at 1,320. The price has been moving higher consistently and may reach the level of 1,825 going forward, as long as the risk management level of 1,320 is respected.

Polyplex Corporation gapped up and broke out of its resistance level at 900. The indicator is back in the bullish momentum regime and looks good for a move upwards from this stage. We are bullish above the level of 900, with a target near 1,286.

Ingersoll-Rand has made five unsuccessful attempts in the past to breach the level of 874. With another attempt a couple of weeks back, we think this level could be taken out soon. Always remember, the more times a level is tested, the more likely it is to be breached! We're going to keep an eye on this one and jump on the wagon when the price moves above 874, for a target near 1,124.

If you've been in the market long enough, you're quite familiar with the meteoric rise as well as the subsequent fall in HEG and Graphite. Well, looks like we might be getting ready for the rise again! The stock has recovered well from its lows and looks good above levels of 1,230. With a target near 1,900, this could be the recovery that the stock has been waiting for.

Astral Poly recovered from its lows rather quickly and has been moving higher since. The price is now at 261.8% retracement and continues to display strength on both absolute and relative basis. We are bullish only above 2,105, with a target near 2,945.

Carborundum Universal has witnessed a sharp move with the indicator moving deep into bullish momentum territory. The inherent strength can be seen in the price move. We are bullish above the risk management level of 550, for a target near 768.

Elgi Equipment looks like it's getting ready to break out of a big three-year base. A move above the risk management level of 174, could take the price further towards 251 in the weeks and months ahead.

Grindwell Norton has been on a tear for two weeks. Swiftly making new all-time highs in almost every consecutive session, the stock looks good for another breakout. We are bullish as long as the price remains above 900, with a target near 1,225.

The Industrial Manufacturing sector is now buzzing with strong moves already underway or on the way.

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

Allstarcharts Team

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