Put Heidelberg Cement in Your Trading Watch List

About the company:

HeidelbergCement (DE:HEIG) India Ltd (NS:HEID) is a subsidiary of Heidelberg Cement Group, Germany. The latter entered India in 2006 and has consistently pursued its strategy of growth in developing markets. The Group acquired majority stakes in Mysore Cements and Cochin Cements and the Indorama Cement joint venture, later converted to a complete acquisition in 2008. The stock is trading at a discount of 7.4% from the all-time high / 52- week high level. The 52-week high and 52-week low range is Rs 285 – Rs 174.

Technical observations:

One-week time frame: (Fig 1)

On a weekly time frame, HCIL scrip broke an important neckline of Rs 214 in Dec 2020 and consolidated going forward. Since then, it has tested a resistance level of Rs 245 multiple times. In June 2021, the share broke this resistance level and touched a high of Rs 285. Afterwards, the stock has consolidated, and Rs 245 level is a strong support level now. Currently, the scrip is trading in Ascending Triangle channel. The share’s Relative Strength Index (or RSI) is above 60, indicating positive momentum. We expect the scrip to move higher, supported by good volumes. A long-term investor should enter once the stock breaks and stays above Rs 265. You should maintain the stop loss at Rs 243 on a weekly closing basis. Our view will negate this level.

One day time frame: (Fig 2)

We can see that the scrip has taken support on the 50-day EMA line on a daily time frame. We can also see that the share is moving in an Ascending Channel and is currently close to the lower end of the channel. We expect the stock to take support at current levels and move higher. Above 50 levels of RSI indicates positive momentum. Positional traders should enter at the current level with a strict stop loss of Rs 254 on a daily closing basis.

Conclusion:

We expect the stock to maintain positive bias and head higher. Short-term traders should enter at the current level and keep a strict stop loss of Rs 261 on a daily closing basis.