ACC, Bata India, RECL, HFCL drop to 52-week lows; trading strategy here

Analyst at Choice Broking cautions against bottom-fishing, and instead recommend a wait & watch approach for a potential trend reversal.

A total of 13 out of the Nifty 500 stocks hit a fresh 52-week low in trades on Wednesday. The list includes prominent names such as ACC, Bata India, RECL and HFCL.  Other stocks to hit 52-week lows today were - Cohance Lifesciences, Jubilant Foodworks, NCC, United Breweries, BASF India,  Ramkrishna Forgings, Blue Dart Express, Mankind Pharma and Page Industries. All these 13 stocks declined in the range of 0.5 - 4 per cent in trades thus far today. In comparison, the BSE Sensex and the NSE Nifty were down 0.3 per cent each at 84,450 and 25,790 levels.  "Even As benchmark indices traded close to record highs, stocks like ACC, Bata India, REC and HFCL were hovering near their 52-week lows, thus highlighting weak participation beneath the surface," says Aakash Shah, Technical Research Analyst at Choice Equity Broking.  The 52-week low reflects sustained selling pressure and, from a technical standpoint, signals that the stock remains out of favour unless proven otherwise by price action, Aakash Shah explained.  At present levels, these 13 stocks have cracked up to 61 per cent from their respective 52-week highs. Cohance Lifesciences is the biggest loser, as the stock has tumbled by 60.8 per cent from its 52-week high of ₹1,328.20.  An analysis of the historic price data shows that NCC, Ramkrishna Forgings and HFCL have plunged around 50 per cent each from their registered 52-week highs. RECL has shed nearly 41 per cent; while Bata India and BASF India have dropped around 35 per cent each.  Given the sharp fall at these counters, these stocks are also seen trading below the key moving averages, both short-term and long-term on the technical charts.  "ACC, Bata India, RECL and HFCL - are trading near their 52-week lows and below or around key long-term moving averages, indicating a weak primary trend. While they are testing important monthly support zones, support alone is not a buy signal," explains Shah.  From a trading strategy, the analyst cautions against bottom-fishing and instead recommends a wait & watch approach; and buying only on confirmation of a trend reversal - such as higher-highs and higher-lows.  Here's a detailed analysis of these 4 stock charts by Aakash Shah: 

ACC

Last Price: ₹1,770 

 

 

    On the monthly chart, ACC is approaching a strong long-term support zone around ₹1,700 – ₹1,750, which has acted as a demand area in previous cycles. The stock remains in a corrective phase, and any recovery attempt is likely to face resistance near ₹2,000 – ₹2,100. Trend stabilisation and a strong monthly close are needed before fresh buying. 

Bata India

Last Price: ₹940 

 

  Bata is testing an important monthly support band near ₹890 – ₹900 after a prolonged downtrend. While this zone may trigger a technical bounce, resistance is placed around ₹1,100 – ₹1,150. The broader structure remains weak until the stock forms higher-lows on the monthly time-frame. 

RECL

Last Price: ₹335 

 

  REC is hovering near a key monthly support zone of ₹330 – ₹325, which coincides with its earlier breakout area. Importantly, the stock is also trading close to its 200-day EMA, making this zone technically significant. Immediate resistance is seen near ₹390 – ₹420. Holding above support is crucial; a sustained move above resistance would be required to confirm trend reversal. 

HFCL

Last Price: ₹64.30 

 

  HFCL is trading close to a long-term accumulation zone on the monthly chart around ₹62 – ₹61. However, the stock remains volatile, with strong resistance near ₹80 – ₹85. Until it breaks above resistance on a monthly closing basis, the set-up remains high risk.    Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.