Deepak Fertilisers, GSFC: Will Farm Bills passage boost fertiliser stocks?

Here's how fertiliser sector stocks look on the charts and what should be your trading strategy

Most fertiliser stocks were trading in the negative territory on Monday, a day after Rajya Sabha passed two key farm bills amid ruckus by opposition members and farmer protests. The Upper House passed by voice vote the Farmer's Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, and the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020. The bills have already been passed by Lok Sabha and will now go to the President for his assent before they are notified as laws. READ MORE

"These reforms have the potential of opening up many private mandis that are far more efficient, automated and mechanized, thus, replacing age-old practices in the Statesponsored mandis. Contract farming would provide farmers access to modern technology, ready markets for its agri produce and better inputs. Overall, the reforms should benefit farmers and encourage contract farming, which in turn, is expected to prove advantageous for the agrochemical/fertilizer sectors," said a September 21 report from Motilal Oswal Securities.

Below is a look at how fertiliser sector stocks look on the charts and what should be your trading strategy. 

Deepak Fertilisers & Petrochemicals Corp. Ltd (DEEPAKFERT): The next upside rally for this counter is expected above the 200-weekly moving average (WMA) at Rs 189.40, which has become its immediate resistance level now. The recent reversal with a high of Rs 182.40 (nearing the 200-DMA placed at Rs 189.40) is witnessing selling pressure. The overall trend is promising till the counter defends Rs 140 levels on the downside. The 100-WMA and 50-WMA are in the process of making a positive crossover. If that happens, then the stock is expected to absorb all the selling pressure and conquer the 200-WMA, simultaneously providing breakout towards Rs 220 levels, as per the weekly chart. CLICK HERE FOR THE CHART
 
Coromandel International Limited (COROMAMDEL): During the market crash in March 2020, this stock did not breach the 200-DMA decisively located at Rs 473. Later, when it conquered 50-DMA, the upside was phenomenal with a jump of over 35 per cent. Now, as it rebounds with a support of 100-DMA located at Rs 708.40, the upside rally remains intact. On the higher side, the counter may witness selling pressure above Rs 830 levels. Once a strong close appears above this resistance, the next upside may see Rs 900 levels quickly.  CLICK HERE FOR THE CHART
  
Chambal Fertilizers & Chemicals Ltd (CHAMBLFERT): A positive crossover of 100-DMA with 200-DMA along with the price conquering 50-DMA at Rs 152.70 strongly exhibits that the stock is an a strong rally. The moving average convergence divergence (MACD) has managed to cross the zero line upward with RSI is stabilised above 40 value. All these trends signal a firm upward momentum that may see the cunter hit Rs 170 in the near-term. The support stays at Rs 146, which is its 100-DMA. CLICK HERE FOR THE CHART
 
Gujarat State Fertilizers & Chemicals Limited (GSFC):  A “Golden Cross” on the counter exhibits a positive sentiment that may come in play once Rs 73 level is conquered. Although the price is witnessing a selling pressure and a resistance on a rise, the 200-DMA placed at Rs 58 levels holds a strong support. The immediate resistance comes in at Rs 65 levels. The 100-DMA is placed at Rs 55, which becomes the next support level. CLICK HERE FOR THE CHART
 
Gujarat Narmada Valley Fertilizers and Chemicals Ltd (GNFC):  The overall trend indicates a rally towards Rs 265, as per the monthly chart. The counter has made a “Golden Cross” of 50-DMA with 200-DMA around Rs 185. The 100-DMA is also making a crossover around Rs 220 levels. There is evidence of follow-up buying, which suggests that the underlying momentum will stay highly optimistic. The immediate support comes in at Rs 210 levels. CLICK HERE FOR THE CHART