ABB, Siemens, Thermax: How to trade capital goods stocks in this market?

Here are trading strategies for key capital goods stocks in a volatile market

ABB India Ltd (ABB): Although the counter is trading slightly below the 200-day moving average, it has not showed any signs of a bigger breakdown yet.  That said, failing to hold above Rs 1,500 has led to price erosion. Going ahead, if the counter sustains above Rs 1,300 - its immediate support – then a rally towards Rs 1,500 may be expected. The Relative Strength Index (RSI) has held even when the price slipped to a new low. From a medium-term perspective, Rs 1,200 -1,180 remains a strong support.  CLICK HERE FOR THE DETAILED CHART

AIA Engineering Ltd (AIAENG): The weekly chart shows a range-bound movement. On the higher side, Rs 1,850 is the resistance and Rs 1,450 acts as support. The stock is witnessing some price correction, which seems technically feasible as the upward march earlier had been swift – from Rs 1,200 to Rs 1,850, or 54 per cent, in the last one year. One can look for buying opportunity once the counter closes above its 200-day moving average (DMA) placed at Rs 1,700. CLICK HERE FOR THE DETAILED CHART

Siemens Ltd (SIEMENS): The chart pattern is a perfect example of “Inverse Head and Shoulder” as per the weekly chart. The counter has broken out of its 200 DMA, placed around Rs 1,100. Such a formation creates a support base for the upside rally. Although the stock has seen a mild correction recently, the 200 DMA remains a key support. A convergence of 50 DMA with 100 DMA and 200 DMA is in process, and if this gets broken on the upside, the stock can head towards Rs 1,400 levels in the days to come. CLICK HERE FOR THE DETAILED CHART

Thermax Ltd (THERMAX): A ‘Golden Cross’ of 50-DMA with 200-DMA has helped this counter to hold above Rs 1,040, as per daily chart. That said, resistance above Rs 1,140 remains a key hurdle. As the price is expected to rise considering the support from moving averages, one needs to cautiously examine the volume build-up. This stock needs strong volumes to conquer Rs 1,140 to enter a bullish phase. A sideways movement cannot be ruled out till the counter sees a rise in volumes. CLICK HERE FOR THE DETAILED CHART

V-Guard Industries Ltd (VGUARD): The counter is strongly trading above its 200 DMA, which is currently placed at Rs 216. The trend-line support also coincides with this level as per the daily chart. A close above 50 DMA, placed at Rs 235.40, may see the counter head towards Rs 247 and Rs 261 levels. Till the stock is trading above trend-line support, positive sentiment should drive the price higher as per chart. The RSI has made a positive crossover and MACD (Moving Average Convergence Divergence) in the process below zero line. Both these show positive signs. CLICK HERE FOR THE DETAILED CHART