Thursday, April 14, 2011

Buy Bharti Airtel with an immediate target of 400

Bharti airtel seems to have broken out of a tough resistance of 360 and has managed to stay above this level in last few trading sessions. On 14th April the counter witnessed high volume of close to 8 million shares with unusually high delivery percentage of 74% which suggests that strong hands were buying stock in the cash segment. Based on options data for Bharti Airtel, it was seen that 380 call has seen a cut of 12% in open interest while the call of 400 has registered an addition of 40% in open interest, which suggest that the bias has shifted towards
400 levels. Also the 360 put has seen an open interest addition of 62% which suggests that 360 would act as a strong support going forward.

The bullishness in the counter seems to be obvious as the dust is slowly settling down and Bharti is emerging as the clear winner among all these events happening in the telecom sector. Bharti is consistently adding around 10 million customers every quarter and the call rates have also stabalized. With its african operation also turning around the analysts feel that there is no downside risk for the company anymore and being the largest company in its sector it becomes the must have choice by default for all the large cap funds and institutions.

Considering the above technical and fundamental factors the stock might touch the level of 400 in a months time. However the traders should keep a stop loss at 359 below which the journey towards 400 will be delayed.

1 comment:

  1. Target Acheived. Though it took a little bit longer than waht was anticipated when the recommendation was made on 14th April 2011, Bharti Airtel touched a high of Rs. 404.40 in today's morning trade.



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