The news is floating in the market of pest attack in the tea growing estates in the north eastern states. The tea prices are at highs following this development. This could be a strong reason to take position in the tea producing company’s counters like Mcleod Russel India Ltd.
- The counter has come off from its lows and is currently trading between the short term moving average (20-EMA) and medium term moving average (50-EMA). Thus the 20-EMA could act as a good entry point for this scrip.
- The ADX reading is at 37 levels which suggest the presence of very strong trend. Any top up of the ADX line could be used to add position in this scrip. The +DI is going up whereas the –DI is on its journey towards down thus having a price appreciation. The buyers are taking position at every dip and no fresh shorting is taking place in this scrip.
- The trend indicator MACD line is continuing its journey toward higher levels. The Signal line is coming towards the positive zone which could give strong trending movement above the Rs.200 level. The MACD Histogram has also bottomed out. Thus it is giving a strong signal to add position at every dip.
- The Slow Stochastic momentum indicator is in the above 80 levels. The %K & %D lies are above the 85 levels which suggest a buying momentum in this scrip.
- We can trade this stock on the long side with the trading price in the range of Rs.189.5-191.5 for a target near the 50-EMA of Rs.205 with a strict stop loss of 1% at Rs.188.
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