Hindustan Zinc, NMDC, Nalco: Trading Strategies for these buzzing stocks

Domestic stock indices extended their gains for the seventh straight session on Wednesday. Buying interest was seen in index heavyweights such as Reliance Industries and a few IT and FMCG stocks. The BSE Sensex advanced 357.59 points, or 0.52 per cent, to end at 69,653.73. The NSE Nifty added 82.60 points, or 0.40 per cent, to end the day at 20,937.70.

A few stocks namely Hindustan Zinc Ltd, National Aluminium Ltd (Nalco) and NDMC Ltd are likely to hog limelight today. Here is what Laxmikant Shukla, Technical Research Analyst at YES Securities has to say on these stocks ahead of Thursday's trading session:

Hindustan Zinc | Buy | Target Price: Rs 365 | Stop Loss: Rs 305
Hindustan Zinc, with a breakout from a falling trendline on the weekly chart, is likely to replicate the movement it had in the month of August 2020. A descending trendline extended from the peak of Rs 383 has been pierced on the upside in this week’s trade, thus putting an end to the short-term downtrend. Also, in the process, the stock regained ground above all its key moving averages on the weekly chart. Thus, one can expect the stock to witness a follow-up buying as it builds on the recent momentum. Buy Hindustan Zinc around Rs 320-324 with a stop loss of Rs 305 for a target of Rs 365.

National Aluminium | Buy | Target Price: Rs 110 | Stop Loss: Rs 92
Nalco has managed to break above its six weeks of sideways range. The stock was trading in the band of Rs 95-88 since October 27. This breakout of the range is a breakout of a rectangle pattern. It seems to be a trend continuation pattern and hints at higher prices. The daily MACD is in a ‘Buy’ mode with a downward sloping line breakout on the daily scale. The momentum indicator RSI is also sloping on the upside, indicating strength. A ‘Buy’ on the stock is recommended around Rs 97-99 with a stop loss below Rs 92 for a target of Rs 110.

NDMC | Caution | Resistance: Rs 196 | Support: Rs 170
NMDC has witnessed a vertical rally and has surged in line with the rally in the metal sector. The trend seamlessly has changed but post such a rally, one should not rule out the potential of cool-off or correction in the counter. As far as levels are concerned, the support base has slightly moved upwards towards the Rs 166-170 zone. At present, the stock has a cluster of resistance at the higher zone starting from Rs 190 to 196. Looking at the recent price action, the stock is likely to continue its northward journey, but one needs to remain cautious in the counter and should trail profits with strict trailing stop loss.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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