UltraTech, ACC: These 6 cement stocks are signalling up to 16% upside

UltraTech Cement and Grasim Industries are only a few bucks short of their lifetime high of Rs 7,055 and Rs 1,547, respectively

Shares of cement companies are showing positive signals on tech charts even as the frontline benchmark indices flounder at all-time high levels. While the S&P BSE Sensex managed to stage a new all-time high of 53,129 on Tuesday, the overall sentiment remains tepid.

Despite caution at the benchmark level, the current momentum in the cement sector indicates an upside of nearly 10 per cent in select stocks. Further, if the breakout is supported by volume, the sector could be in for a sharp upside in the short-term. Shares of UltraTech Cement and Grasim Industries, for instance, are only a few bucks short of their lifetime high of Rs 7,055 and Rs 1,547, respectively.

Even fundamentally, the outlook for the cement sector remains strong. "We believe the cement industry is in the sweet spot now, as all key consumption drivers are showing signs of traction, which will aid the cement companies to sustain robust earnings growth. Thus, we believe a valuation re-rating is on the cards for the cement companies in light of promising growth visibility," said Binod Modi and Girija Shankar Ray, research analysts at Reliance Securities.

Amid this backdrop, here's a look at what tech charts are indicating for the leading cement players:

ACC Ltd (ACC)

Likely target: Rs 2,200 to Rs 2,300 (after crossing Rs 2,050)

Upside potential: 7% to 12%

The downside support of 100 days moving average (DMA) firmly indicates buying momentum in case the stock witnesses any weakness. Although the scrip is having a tough time crossing Rs 2,050 level with aggressive momentum, a decisive close above this hurdle can result in a breakout towards Rs 2,200 and Rs 2,300. Furthermore, if the Relative Strength Index (RSI) breaks out above 60, the stock could see added aggression, suggest tech charts. CLICK HERE FOR THE CHART

UltraTech Cement Ltd (ULTRACEMCO)

Likely target: Rs 7,500 to Rs 7,700 (breakout above Rs 7,000)

Upside potential: 7% to 10%

The major support for this stock is at Rs 5,620 level, which is its 100-DMA, while the hurdle is seen around Rs 7,000-mark. An aggressive close, supported by strong volumes, above this level may result in a breakout towards Rs 7,500 and Rs 7,700. Moreover, the Moving Average Convergence Divergence (MACD) is holding the upward bias above the zero line. CLICK HERE FOR THE CHART

Ambuja Cements (AMBUJACEM)

Likely target: Rs 370 to Rs 380

Upside potential: 5% to 7%

A fresh breakout above Rs 351 level reflects a strong momentum in the stock. Moreover, increased volumes, along with a positive crossover of RSI, indicates strength and further upside for the stock towards Rs 370 and Rs 380. The support for the stock stays at Rs 340 levels on a closing basis, according to tech charts. CLICK HERE FOR THE CHART

Grasim Industries Ltd (GRASIM)

Likely target: Rs 1,650 to Rs 1,710 (after a close above Rs 1,520)

Upside potential: 8% to 12%

A firm close above Rs 1,520 may open doors for an up move towards Rs 1,650 and Rs 1,710 levels, as per the daily chart. On the downside, the supports are seen at Rs 1,460 and Rs 1,400 levels. The RSI is trading in a negative crossover, but if it holds the support of 50 value, the upside bias may see a sharp reversal. CLICK HERE FOR THE CHART

The Ramco Cements Ltd (RAMCOCEM)

Likely target: Rs 1,200 and Rs 1,280

Upside potential: 11% and 16%

The medium-term outlook of the stock is bullish as it continues to trade above the support of Rs 990 levels, its 100-DMA. The breakout of Rs 1,050 level suggests a possible upside towards Rs 1,200 and Rs 1,350. Furthermore, an increase in volume is also suggestive of positive sentiments. CLICK HERE FOR THE CHART

India Cements Ltd (INDIACEM)

Likely target: Rs 210 and Rs 218 (after crossing Rs 200)

Upside potential: 5% and 9%

The stock faces resistance at Rs 200 and has support at Rs 190 levels on a closing basis. If it manages to conquer the resistance, an upside rally towards Rs 210 and Rs 218 levels cannot be ruled out, as per the daily charts. For now, the current scenario indicates sideways movement for the stock. That said, the medium-term outlook has the support of 100-DMA, currently placed at Rs 176 levels. CLICK HERE FOR THE CHART