Tech analyst backs these 3 stocks even as mining, sugar face cost pressure

Sachin Gupta, research analyst at Choice Broking recommends accumulating Hindustan Zinc, Coal India and EID Parry on dips for a potential upside bounce as per technical charts.

Shares of mining and sugar companies are in focus following the steep 21 per cent hike in industrial fuel prices. Last week, oil marketing companies increased industrial diesel prices from ₹92.68 per litre to ₹112 per litre amid a surge in crude oil prices owing to the West Asia conflict.  Industrial officials fear that the sharp hike in industrial diesel prices is likely to squeeze sugar mills and push up mining costs. Sugar industry representatives expressed concern that fuel price volatility was weighing on the sector's viability.  Similarly, the mining industry, where diesel forms a major share of operating expenses, also warned of a wider economic ripple effect. READ MORE  Given this background, here's a trading strategy in select mining and sugar stocks by Sachin Gupta, vice president, research at Choice Broking. 

Technical outlook on Coal India, Hindustan Zinc and EID Parry

Coal India

Current Market Price: ₹443 

 

 

  Coal India stock hit a 52-week high at ₹476 this month, and is showing a higher highs and higher lows pattern on the weekly charts, signalling that it is moving out of its long-term trading range into a more expansionary phase, says Sachin Gupta.  "From a technical standpoint, the stock is trading well above its key moving averages, often referred as the "golden alignment," with 50-day SMA around ₹434 and the 200-day SMA near ₹399. These levels provide a solid structural floor for the stock," explains the analyst from Choice Broking.  Gupta recommends a buy on dip strategy, with likely support around ₹450–₹455-₹445 levels. On the upside, he expects Coal India to bounce back to ₹480-₹500 levels, as long as ₹445 remains protected. 

Hindustan Zinc

Current Market Price: ₹487 

 

  The recent dip in Hindustan Zinc doesn't necessarily signal a trend reversal, especially since the broader pattern of higher highs and higher lows is intact, says Gupta.  "The stock is holding above its 100-week and 200-week Exponential Moving Average (EMAs), which is a positive sign from a longer-term perspective. The ₹470–₹450 band appears to be a strong demand zone," the analyst explains.  The analyst recommends accumulating Hindustan Zinc stock on dips closer to the ₹450–₹470 range for a better risk-reward balance. On the upside, Gupta expects ₹550–₹570 range to act as a tough barrier. 

EID Parry (India)

Current Market Price: ₹768 

 

  EID Parry is trading close to its 200-week EMA, a level that is often seen as a strong long-term support zone. Historically, this area has attracted consistent buying interest and has the potential to act as a solid base for a possible up move, highlights the analyst from Choice Broking.  "The Relative Strength Index (RSI) is currently at 30, which places the stock in the oversold territory. Readings at this level generally suggest that selling pressure may be nearing exhaustion, increasing the chances of a short-term bounce," explains Gupta.  Considering these technical factors, the analyst recommends to accumulate the EID Parry stock at current levels, with a stop at ₹735. Gupta reckons an upside target of ₹815.  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.