Future Retail stock exhibited strong momentum in April when it rallied from 85 to 145. Post that rally - stock just went into long consolidation by trading between 116 and 145. As it always happens - traders lose interest when there is so much of excitement elsewhere. But it seems the interest is returning and here's why:
1. The stock has managed a strong bounce from support of 116 again
2. The bounce has come on very impressive volumes (Read interest); and it means a minimum rally to 145 is on the cards, obviously with stop loss below 111.9
3. There is speculation that the Modi government may be considering allowing foreign portfolio investors to own majority stake in retail companies. Reports suggest that Department of Industrial Policy and Promotion (DIPP) has proposed foreign direct investment (FDI) ceiling of 51 percent in multi-brand retail be made composite cap.
What does this mean?
Will stock rally to 145 and beyond...needs to be seen. The interest theory will get get thrown out of window if stock closes below 112. Remember, there is lot of speculative news element behind interest - so beware of the risks in such trades.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers