Major hurdles out! West Coast, Star, Andhra Paper may see up to 16% gains

Paper stocks have rallied over 20 per cent in the recent past on hopes of higher demand as schools, offices reopen for normal functioning; charts indicate more upside.

Shares of paper companies have been in demand recently, with select stocks soaring over 20 per cent in the last few days amid hopes of increased demand and price hike as Covid-19 related eased and offices, schools reopened for normal activiity.

Andhra Paper and West Coast Paper Mills zoomed 27 per cent and 25 per cent, respectively, while Star Paper Mills and JK Paper gained 22 per cent, each. Orient Paper & Industries Limited moved up 17 per cent.

Here's the future outlook for paper stocks amid the current rally:-

Andhra Paper Limited (ANDHRAPAP)

Likely target: Rs 301- Rs 298

Upside potential: 10%

Andhra Paper recorded a new 52-week high of Rs 281.60 so far on Wednesday. The current rally has succeeded in conquering the hurdle of Rs 232 level, its 200-days moving average (DMA). Even though, the Relative Strength Index (RSI) entered the overbought territory, the crossover of Moving Average Convergence Divergence (MACD) over the zero line suggests positive momentum ahead. The next resistance for the stock seems placed at Rs 298 level, its 200-weekly moving average (WMA). The stock has near-term support around Rs 260 and Rs 255 levels. CLICK HERE FOR THE CHART

 

West Coast Paper Mills Limited (WSTCSTPAPR)

Likely target: Rs 350

Upside potential: 16%

The stock has dismantled the pressure range from Rs 300 to Rs 280, shows the weekly chart. The strong move accompanied with higher volume indicates higher interest among market participants. The positive momentum can help the stock rally towards Rs 350 and Rs 400 levels from a medium-term prespective. The immediate support for the stock comes at Rs 280, and needs to be considered on a closing basis, while the long-term support is positioned at Rs 220. A “Golden Cross” breakout does add positive momentum for potential long-term gains.  CLICK HERE FOR THE CHART

Star Paper Mills Limited (STARPAPER)

Likely target: Rs 170

Upside potential: 12%

On the weekly chart, the stock broke out of the trendline resistance at Rs 138 levels. A bullish signal that further witnessed a robust interest from market participants on conquering the 200-DMA at Rs 141.  Going ahead, as long as the support of 200-DMA is defended, the positive momentum could see the stock rally towards Rs 170, daily chart exhibits.  CLICK HERE FOR THE CHART

 

JK Paper Limited (JKPAPER)

Likely target: Rs 325

Upside potential: 10%

The medium-term trend for the stock is bullish as long as JK Paper protects the support of 50-WMA, presently set at Rs 213. The stock has touched a new all-time high so far in a day at Rs 300-mark. The stock now has a support of Rs 275, and positive trend is likely to lead the stock to Rs 325 level, shows the daily chart setup. CLICK HERE FOR THE CHART

 

Orient Paper & Industries Limited (ORIENTPPR)

Likely target: Rs 37

Upside potential: 11%

The stock is making efforts to firmly sustain above the 200-DMA level. As and when that happens, which seems a high possibility considering the momentum and the support of MACD, which is on the verge of rising above the zero line. Following these two developments the stock can gain further upside. The next resistance for the stock exists at Rs 37 mark. CLICK HERE FOR THE CHART