ACC, UltraTech Cement, Ramco: Here's how cement stocks look on the charts

Except Ambuja Cements, Ultratech Cement, Ramco Cements, and India Cements need to surpass crucial key levels to lead to a rally ahead

Shares of Cement companies lost steam after their profitability took a hit amid margin contraction, weak cement prices, surge in fuel costs, and lower demand during the July-September quarter.  

For instance, ACC and India Cements have slid 13 per cent and 22 per cent, respectively, from their recent peaks in the last two months. UltraTech Cement and Ramco Cements, too, are down 10 per cent and 36 per cent so far in calendar year 2022.  

The companies missed Street estimates for Q2FY23 earnings with disappointing numbers. 

On a year-on-year basis, UltraTech Cement reported a 42 per cent fall in its net profit, while Ramco Cement posted a 98 per cent drop in its profit after tax. 

ACC posted a surprise loss of Rs 87.35 crore in the quarter as compared to a Rs 450 crore profit a year ago. Likewise, India Cement reported a net loss of Rs 113.26 crore in Q2FY23. Ambuja Cement’s net profit declined 69 per cent on-year to Rs 138 crore. 

Against this backdrop, here’s what technical charts suggest: 
 

Ambuja Cements (AMBUJACEM)

Likely target: Rs 600 and Rs 625

Upside potential: 8% to 11%

After experiencing sideways trend between Rs 540 to Rs 470 in September – October months, the stock has gradually rallied upwards, and is now looking to hit fresh highs by entering new uncharted territories. At present, the immediate support is at Rs 500 and the breakout over Rs 540 shall continue to bolster any sudden weakness. Trend now suggests the positive rally is headed to Rs 600 and Rs 625. CLICK HERE FOR THE CHART

India Cements Ltd (INDIACEM) 

Outlook: Holding support of Rs 220

Following the gap-up breakout at Rs 220 in early August this year, the stock rallied 35 per cent, and then witnessed profit booking and an elevated sell-off. This led the stock to drift lower, and test the breakout support of Rs 220. In a span of last two months, the cement major has succeeded to hold its breath twice near the same support mark. As a result, unless the counter negates this cushion, the trend could again lead to a rally towards Rs 260 and Rs 280, which are the next looming hurdles. CLICK HERE FOR THE CHART

ACC Ltd (ACC)

Outlook: Trend is sluggish

ACC fell 21 per cent from the peak of Rs 2,758, logged in September this year, before holding ground near the 200-day moving average (DMA) set at Rs 2221. Present chart texture indicates a barrier at Rs 2,500-mark, and a breach above the same could push bulls towards Rs 2,650 levels. Immediate support is at Rs 2,350 levels. The trend looks sluggish with no major price indication. CLICK HERE FOR THE CHART

UltraTech Cement Ltd (ULTRACEMCO)

Outlook: New highs likely above major hurdle of Rs 7,000

In February this year, UltraTech Cement lost ground over the Rs 7,000-mark, resulting the stock to dwindle towards Rs 5,100, plummeting 27 per cent in less than four months. Now, as the stock is back to Rs 7,000, the price action is struggling to overcome the selling pressure. Thus, unless the stock forfeits this barrier, the trend could remain sluggish with continued effort to break this obstacle. A decisive move above Rs 7,000 would mean the stock is headed to Rs 8,000 and further to fresh all-time highs. CLICK HERE FOR THE CHART

The Ramco Cements Ltd (RAMCOCEM)

Outlook: Trend is weak

Ramco Cements have broken the neckline of "Head and Shoulder" pattern at Rs 700, a bearish formation indicating selling pressure may accelerate upon a clear breakdown. The stock has fallen in the bear grip with further depreciation looking imminent. Due to Thursday's losses, which pushed the Moving Average Convergence Divergence (MACD) into a negative crossover right near the zero line, the bears have twisted momentum in their favour. The support comes at Rs 600 level with initial hurdles at Rs 660 and Rs 685 levels.  CLICK HERE FOR THE CHART