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⭐️ Ultra Equity Advice #115 | Buy | Expected Profit 14-18% | Arijit Banerjee

OUR RECOMMENDATION

  Buy    EMAMI LIMITED  

CP#284.35
IdeaBUY
Buy Range275 – 285
Target320 – 330
StopLoss*260
Duration15 – 18 Trading Days
Potential Returns^14 – 18%
CP#IdeaBuy RangeTargetStopLoss*DurationPotential Returns^
284.35BUY275 – 285320 – 33026015 – 18 Trading Days14 – 18%

# CP – closing price on Feb 17, 2020
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 302.
^ Potential returns are calculated based on the median of buy range.

COMPANY OVERVIEW - EMAMI LIMITED

Emami Limited, a leading FMCG manufacturing and marketing company engaged in personal care & healthcare products in India and Internationally. This flagship company of the diversified Emami Group sells over 300 different products and having brands like Navratna, BoroPlus, Fair & Handsome, Zandu Balm, Kesh King & Mentho Plus in their portfolio. Their product categories consist of hair care, skin creams, soaps and lotions, talcum powder and ayurvedic healthcare products. Their product portfolio includes Navratna Oil, Fair and Handsome, Sona Chandi Chyawanprash, Zandu Balm, Navratna Cool Talc, Himani Fast Relief, Emami Healthy & Fair, HE Deodrants, Emami Malai Kesar Cold Cream, Boroplus Antiseptic Cream, Lalima, Sardi Ja and Zandu Pancharishta.
In Q3FY20 Emami Limited has reported the Net Profit surged by 28.03% to Rs.271.30 crore on a YOY basis.

Stock Data
NSE CodeEMAMILTD
Sectoral IndexNifty FMCG
52W High416
52W Low245.9
Face Value1
Relative Performance_Emami Limited vs Nifty FMCG Index

EMAMI LIMITED TECHNICAL ANALYSIS (WEEKLY)

  • The lows of 270 also correspond to previous intermediate lows which were tested earlier years as shown on the weekly chart, thereby making it a strong support.
  • The stock has formed Bullish Harami candlestick on the daily chart near the bottom which is a bullish reversal formation. Normally this type of candlestick suggests the bull have taken control of a security’s price movement from bears.
Emami Limited Technical Analysis
Emami Limited Technical Analysis - Weekly Chart

EMAMI LIMITED TECHNICAL ANALYSIS - PRICE VS RSI

  • RSI have formed positive divergence on the weekly chart, which indicates losing of selling momentum and a possible rise in trend reversal.

    Note: There are three successive lower bottoms on price and three consecutive Higher bottoms on RSI indicator. Generally, after the third divergence, the probability of Price reversal becomes very high.

Emami Limited Technical Analysis - RSI Chart
Emami Limited Technical Analysis - Price vs RSI (Weekly)

EMAMI LIMITED TECHNICAL ANALYSIS - PRICE VS MACD

  • MACD forms Bullish divergence in weekly chart. This occurs when the price is making lower swing lows while the indicator is making higher lows.
    It is meant to show that selling momentum is slowing and that the downtrend is more susceptible to a reversal.

    Note: Divergence in lower time frame is not as useful as spotted in the Higher Timeframe.

Emami Limited Technical Analysis - MACD Chart
Emami Limited - Price vs MACD (Weekly)

Emami Limited Technical Analysis - Price vs MFI & OBV

  • Money Flow Index forms bullish divergence – the price continues to trend lower, but the MFI on several occasions does not make new lows and instead creates higher highs.
  • On Balance Volume (OBV) also shows positive signals as the OBV crossed above the 15 weeks Moving Average, which points out for a positive breath in the stock.
 
Emami Limited Technical Analysis - OBV and MFI Chart
Emami Limited Technical Analysis - Price vs MFI & OBV (Weekly)

LIVE UPDATE - POSITION & ACTIVITIES

Position: Long Emami Limited at ₹275 by GoodluckCapital on TradingView

Position: Long Emami Limited at ₹275 by GoodluckCapital on TradingView

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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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