Multibagger Tyre stocks to give 50% return in 6 months time

 

On the Weekly charts JK tyre has broken out of the CUP and handle pattern and the volumes for the week have been huge.

We can also see that the stock is moving in an uptrend, and now it is facing the channel resistance of the upper band, also the Rs.110 levels have been huge resistance for the stock for quite some time.

Now if the next week the stock manages to stay above the Rs.110 mark and sustains above it, it is possible that the stock can then show a target of rs.160, however the time target that appears for the stock to reach the levels would be close to 27 weeks. (i.e almost 6 months time frame)

Also what remains to be seen is whether the stock now break this upward moving channel and manages to trade above it.

Considering the volume action it is quite possible the stock can well break above these levels. The stock is also getting ex-dividend on the 23^rd of august, the dividend per share is Rs 2.5

Considering the above price action it is advisable to wait for the stock to move in either direction to take a call on the same….i.e either accumulate the stock on fall or buy it once it crosses and maintains the Rs.115 levels

On a Fundamental level as well J.K tyre Chennai Capacity has come in this qaurter which is going to add to the bottom line of the company, also the Natural rubber prices which is a key raw material for Tyre companies have come down drastically helping them in the process........

Weekly Charts: Ceat

Another tyre stock that looks promising at the moment is CEAT, it has been forming an Inverted head & shoulder pattern and a close above the Rs.115 levels will give the confirmation.

Once the Breakout is achieved the stock can give upward targets to rs.160 levels. This both stocks have the potential of becoming multi bagger stocks. The time target would be the same approximately 27 weeks of time.

 

But one should wait for the stock to close above the Rs.115 levels on weekly closing basis and then enter the stock.