The stock price of SKF Bearings has been one of the major underperformer. From a peak of Rs 1,500 in mid-April, the stock had recently fallen to a low of Rs 552, a dip of almost 65 per cent.However, when the stock was seeking low levels, major oscillators such as RSI and MACD have formed a higher bottom. The clear divergence between price and oscillators was nothing but a hint towards a rally. This was confirmed when the stock moved upto Rs 639 recently.
In fact, this was the first time that the stock has moved the short-term moving average. Not only the daily oscillator but even the weekly RSI and MACD have given a positive divergence.
Even if the stock show a retracement of 33 per cent, the scope for further appreciation is ample. Investment is recommended at the current level and on every decline. Keep a stop loss at Rs 550.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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