UltraTech, ACC: More steam left in cement stks as follow-up buying resumes

A follow-up buying may induce stronger momentum trapping short-sellers

Cement stocks have been on an upswing since the last few sessions in an anticipation of a pickup in construction activity across the country. According to a report by Business Standard, capacity utilisation at cement companies has improved significantly in May after a sharp drop in April.

Individual house builders (IHB) segment, which drives 55 per cent of the annual demand, has been reviving after construction activities were permitted by various state governments. READ MORE
 

Here's an analysis of key cement stocks on technical parameters:

ACC Ltd (ACC): The consolidation in the range of Rs 1,210 to Rs 1,120 levels has given a breakout for short term trend. Now, as the counter trades successfully above Rs 1,250, the upside towards 200-day moving average (DMA) at Rs 1,370 seems possible, as per the daily chart. The volumes have remained stagnant; however, the strength in counter is pulling the price in the upward direction. CLICK HERE FOR THE CHART

Ambuja Cements Ltd (AMBUJACEM): The counter faces resistance at 200-DMA placed around Rs 139.50 levels. Till the support of Rs 185 is held on a closing basis, it may cross the 200-DMA resistance with decisive strength. The Relative Strength Index (RSI) has an “Inverse head and shoulder” formation that may disturb the upside momentum, this needs to be cautiously watched till RSI crosses 64 value. CLICK HERE FOR THE CHART

UltraTech Cement Ltd (ULTRACEMCO): After a decent breakout above Rs 3,670 levels, the counter now faces selling pressure at 100-DMA placed at Rs 3,895 levels. The next breakout is located above Rs 3,995 which is its 200-DMA. This level may trap short sellers driving prices towards Rs 4,200 levels, as per the daily chart. The immediate support is at Rs 3,650 levels. CLICK HERE FOR THE CHART

Grasim Industries Ltd (GRASIM): A “Cup and Handle” pattern has boosted the upside for short term trend. As it moves above 100-DMA located at Rs 620 levels, further upside is inevitable. Going ahead, if the volume structure favors buyers with the addition of longs, then this rally may touch Rs 680, which is the 2000-DMA, as per the daily chart. The trend remains bullish as Moving Average Convergence Divergence (MACD) successfully trades above the zero line with no signs of turning downward. CLICK HERE FOR THE CHART

HeidelbergCement India Ltd (HEIDELBERG): This counter decisively crossed the resistance of 100-weekly moving average (WMA) placed at Rs 168 levels. If it manages to sustain above Rs 175, then a rally towards Rs 190 cannot be ruled out. Both technical indicators, RSI and MACD are trading with positive crossovers rising upward, indicating strength and upward momentum. The counter is well placed above the support of Rs 160 levels. CLICK HERE FOR THE CHART