Crisis in Dhaka: Strategies for stocks of companies related to Bangladesh

Analysts believe, Indian textiles companies are likely to benefit from the Bangladesh turmoil, while that of FMCG and auto may take a hit. Here's a technical outlook on key stocks from these sectors.

India's neighbouring country, Bangladesh is going through an unprecedented turmoil since the last two months. On Monday's the nation's Prime Minister Sheikh Hasina, had to resign and flee Dhaka following a high number of deaths amid the ongoing anti-government protests. The Bangladesh Army chief declared that an interim government will now run the country.

Bangladesh is India's 25th largest trading partner, with the size of the bilateral trade at $12.9 billion. The trade is dominated by exports, with Bangladesh being India’s eighth largest export partner. In FY24, India's exports to Bangladesh contracted 9.5 per cent to $11 billion.

Trains between India and Bangladesh have remained suspended since July 19 after the protests started last month, and will remain suspended indefinitely. Indian exporters said the developments would hurt bilateral trade, but hoped that the situation would normalise soon. READ MORE

Apart from fast moving consumer goods (FMCG), Bangladesh is also a key destination for Indian auto exports. Multiple Indian companies have business interests in Bangladesh and the ongoing crisis is likely to impact these countries.

However, experts recommend that India-based textile companies may benefit from the crisis, as importers will look elsewhere.

Against this background here's an technical outlook on select Indian stocks across, FMCG, auto and textile sectors:

Nitin Spinners

Current Price: Rs 429

Upside Potential: 10.7%

Support: Rs 423; Rs 404

Resistance: Rs 435; Rs 443

The daily chart of Nitin Spinners shows that the stock has been making higher-highs and higher-lows since the last two months. On Monday, the stock was seen testing support around its 20-DMA (Daily Moving Average) at Rs 404 levels. On the weekly scale, the stock has an immediate support at Rs 423.

The near-term bias is likely to remain cautiously optimistic as long as the stock manages to sustain above these two key support levels. On the upside, the stock can potentially rally to Rs 475 levels. Interim resistance for the stock can be expected around Rs 435 - Rs 443 levels. CLICK HERE FOR THE CHART

Century Textiles

Current Price: Rs 2,229

Upside Potential: 12.2%

Support: Rs 2,100; Rs 2,080

Resistance: Rs 2,310

Century Textiles stock has been moving in a tight range of Rs 2,100 - Rs 2,400 for the last two months. On Monday, August 5, the stock once again sought support around the lower-end of the existing trading band and then bounced back. CLICK HERE FOR THE CHART

Technically, the stock now seems to be taking support around the lower-end of the Bollinger Bands, which also coincides with the super trend line at Rs 2,100 levels. Further, the weekly chart shows presence of key support at Rs 2,080 levels.

Hence, going forward the stock is likely to remain range-bound, with strong support expected around the above mentioned levels. On the upside, the stock may stretch its up move towards Rs 2,500-mark. Interim resistance for Century Textiles can be expected around Rs 2,310.

Bajaj Auto

Current Price: Rs 9,512

Bias: Range-bound

Support: Rs 9,250; Rs 9,050

Resistance: Rs 9,750

The daily Bollinger Bands suggests a tight range of Rs 9,250 - Rs 9,775 for the Bajaj Auto stock. Further, the stock at present is seen quoting around Rs 9.500 levels; wherein the short-term moving averages are converging. The 20-DMA (Daily Moving Average) stands at Rs 9,517, while the 50-DMA stands at Rs 9,520. CLICK HERE FOR THE CHART

Given the technical setup it's prudent to wait and watch for a decisive move at the counter before taking a direcional call. Having said that, the overall bias seems slightly favourable as the stock holds above Rs 9,050 bullish pivot on the weekly scale.

Marico

Current Price: Rs 645

Downside Risk: 9.3%

Support: Rs 637; Rs 629

Resistance: Rs 665; Rs 690

Marico stock has dipped below its short-term moving average on the daily scale; further key momentum oscillators too have turned negative for the stock. 

At present, Marico seems to be seeking support around its 50-DMA at Rs 637, below which immediate support for the stock exists at Rs 629. Break and sustained trade below the same, can trigger a slide towards its 100-DMA at Rs 585. CLICK HERE FOR THE CHART

In case of a pullback, the 20-DMA at Rs 665 will act as an immediate hurdle, above which resistance can be expected around Rs 690 levels.

Dabur

Current Price: Rs 635

Bais: Mixed

Support: Rs 623; Rs 611; Rs 605 

Resistance: Rs 648

Dabur is seen testing support around its 20-DMA at Rs 635. The outlook seems mixed, as the daily chart weighs in a negative bias, while the weekly remains positive.

Chart shows presence of key support for Dabur around Rs 623, Rs 611 and Rs 605 levels. Hence, the bias is expected to remain cautiously positive as long as these supports are held. Break and sustained trade below the same can trigger a fall towards Rs 570 levels. CLICK HERE FOR THE CHART

On the other hand, the stock faces near resistance at Rs 648. The stock will need to cross and sustain consistently above the same for a rally towards Rs 675 levels.