ACC, Ambuja Cement, Grasim: Trading strategies for cement stocks

Ambuja Cement is exhibits a positive bias, and is likely to further gains on follow-up buying; whereas other cement stocks need to overcome major hurdles.

Cement shares have been in focus lately following reports of the world's largest cement maker, Holcim Group, looking to exit investments in India after 17 years of its entry by selling holdings in ACC and Ambuja Cement. READ MORE

Reportedly, Sajjan Jindal-led JSW Group has initiated discussions with private equity (PE) firm Carlyle to join forces and back its bid for Holcim's Indian cement operations.

Meanwhile, ACC on Tuesday reported a 29.5 per cent YoY decline in consolidated net profit at Rs 396.33 crore for the first quarter ended March 2022, mainly due to the rise in fuel cost. Revenue, however, grew marginally by 3.4 per cent to Rs 4,484.05 crore.

Shares of Ambuja Cement have surged 26 per cent, while ACC added 6 per cent so far for in April. On a year to date basis, both the stocks were trading with marginally gains. 

Further, Ambuja Cement is on a four-week winning streak, whereas shares of ACC traded flat in the same period. Both the stocks are on investor’s radar as they recently overcame the 200-day moving average (DMA), an indicator that symbolizes a strong momentum.
 

With news flow likely to remain thick and fast on the fundamental front, here's how the cement stocks are placed as per the technical charts.
 

Ambuja Cements (AMBUJACEM)
Likely target: Rs 400 and Rs 420
Upside potential:  5% to 10%

In the past six trading sessions, the stock has hovered around the 200-DMA, positioned at Rs 369.80 level. It is making an attempt to breakout on the upside and as and when it does the rally could lead the stock towards Rs 400 and Rs 420 levels, the next major obstacles, shows the daily chart.

The overall outlook shows a promising structure as the Moving Average Convergence Divergence (MACD) successfully trades over the zero line. The trend continues to scale higher with a support of Rs 350. CLICK HERE FOR THE CHART
  
ACC Ltd (ACC)
Outlook: Subsequent selling resistances on upside

The major breakout for ACC shares is placed above Rs 2,350 level, exhibits the daily chart. The current momentum is managing to absorb all the pressure emerging over Rs 2,200 level. The strength and sentiment shows bullishness, which has a support of Rs 2,050 level.  CLICK HERE FOR THE CHART

The Ramco Cements Ltd (RAMCOCEM)
Likely target: Rs 867
Upside potential: 7.50%

The stock has a breakout of “Double Bottom” formation. The said pattern comfortably holds the support of 50-DMA, presently located at Rs 787.50-level. This structure reflects a positive bias that could run up to Rs 867 level, which is its 100-DMA. CLICK HERE FOR THE CHART
 
 
UltraTech Cement Ltd (ULTRACEMCO) 
Likely target: Rs 7,000 and Rs 7,260
Upside potential: 2% to 5.50%

On a daily scale, the stock has support of the 50-DMA, which needs to be considered on a closing basis. The 50-DMA is currently placed at Rs 6,611. The medium-term outlook is poised above the 100-WMA, placed at Rs 6,075 level. The present trend hints of a rally towards Rs 7,000 and Rs 7,260, its 100-DMA and 200-DMA, according to the daily chart. CLICK HERE FOR THE CHART
 
The Grasim Industries Ltd (GRASIM)
Likely target: Rs 1,900
Upside potential:  8.50%

The shares of Grasim Industries have minor hurdle at Rs 1,800 level. The stock did manage to conquer, but lacked on the follow-up buying. Going ahead, any positive up move over Rs 1,800 could see a breakout in the direction of Rs 1,900. The support comes at Rs 1,683, its 100-DMA level. CLICK HERE FOR THE CHART