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Kajaria Ceramics Limited Technical Analysis #99: Buy | Target Rs 560 | Arijit Banerjee

OUR RECOMMENDATION

CP#536.05
IdeaBUY
Buy Range515 – 530
Target560 – 570
StopLoss*500
Duration12 – 15 Trading Sessions
Potential Return^4 – 6%
CP#IdeaBuy RangeTargetStopLoss*DurationPotential Return^
536.05BUY515 – 530560 – 57050012 – 15 Trading Sessions4 – 6%

# CP – closing price on Nov 29, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 548.
^ The returns are calculated based on CP#

COMPANY OVERVIEW

Headquartered in Delhi, Kajaria Ceramics Limited is the largest tile and floor manufacturer in India having 8 operational plants and markets its products through Kajaria Eternity World, Kajaria Galaxy, Kajaria Prime Plus Showrooms and other multi-brand dealers. Its production includes ceramic wall, floor tiles, polished vitrified tiles, glazed vitrified tiles, adhesives for ceramics and sanitary ware and faucets. This tile manufacturing company reported a consolidated net profit of Rs 93.07 crore for the quarter ended September 30, 2019, compared to Rs 50.63 crore reported during the corresponding period of 2018-19. Net profit was improved by 84% Y-o-Y.

Stock Data
NSE CodeKAJARIACER
Sectoral IndexNifty 500
52W High649.65
52W Low417
Face Value1
Relative Performance_Kajaria Ceramics vs Nifty 500

TECHNICAL OBSERVATIONS (WEEKLY)

  • As we see in the Weekly chart, the long term trend is positive since October 2018. There is a steady support baseline which is moving upwards along with price rise.
  • The recent low of ₹ 507.1 also corresponds to previous intermediate lows on the Uptrend line, which were tested previously as shown in the blue arrow mark, thereby making it strong support.
Kajaria Ceramics Weekly Chart
Kajaria Ceramics Weekly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • The stock has posted a decisive close above 5 EMA and 9 EMA crossover on daily charts.
  • After the strong breakout rally in Mid-September 2019, the stock has taken Support on the earlier resistance which is around 506. This highlights the change of polarity principle and signals a higher base building process that will act as a launchpad for the next up move.
  • The momentum oscillator RSI (14) also gave trendline breakout and moved above 50 mark on the daily time scale, showing strength in the counter. RSI has also formed positive divergence.
Kajaria Ceramics Daily Chart

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MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

This research analysis is prepared by Arijit Banerjee, CMT, CFTe. An engineering graduate developed an early interest in Trading since the age of 20. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and also has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts (IFTA), USA. His contribution to the market research was recognized by SEBI, the Regulatory Body of Indian financial market and given him the registration number INH300006582 as a Research Analyst. Over the years, he has gained experience in Technical Analysis with a demonstrated history of working in different asset classes. Himself as a trader, he has trained and continues training novice and experienced traders to become successful, confident and profitable in the financial market.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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