Buy National Aluminium in the range of Rs. 36.00-36.90
Target: Rs. 44
Stop Loss: Rs. 32.95
Time frame: Three months
Derivatives & Quantitative Outlook
Metals are one of the best performing asset classes in the recent market risk on rally. The prevailing down trend in most of the metal space has halted while copper has led the way with rest of the commodities also moving higher. Domestic stocks have so far remained range bound and did not witness any major upsides. However, considering continued additions in open interest, we believe stocks like Nalco are likely to gain further in coming months. We believe that current levels of the stock provide a good buying opportunity. Domestically, rationalisation of duty structure to restrict imports can be seen as a major positive for commodity stocks.
National Aluminium (Nalco) has consolidated in the range of Rs. 30-35 in the last three months. The recent up move above the hurdle zone indicates expectations of further upsides in the stock. The open interest in the stock had declined from 60 million shares in November 2019 to just 25 million in shares in March 2020 due to market correction. However, since then, a gradual rise in open interest was seen. In the July series itself it has risen to 40 million shares from 30 million seen in June, indicating ongoing long additions.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_QuantPick_Nalco_Jul20.pdf
Shares of NATIONAL ALUMINIUM CO.LTD. was last trading in BSE at Rs.36.7 as compared to the previous close of Rs. 35.75. The total number of shares traded during the day was 1509178 in over 28986 trades.
The stock hit an intraday high of Rs. 37.5 and intraday low of 36.15. The net turnover during the day was Rs. 55638595.