Wednesday, December 25, 2013

How to play with FMCG this year?

Since the news of Stake rise by Anglo-Dutch company Unileaver  PLC is ready to pump some +19K crores which is roughly around 67%. The FMCG market had a hard time; slowdown, high cost, profit margin, rupee depreciation, had affected almost all FMCG stocks. We have seen a consolidation of HUL stock from last June-July even FMCG stock have seen consolidation from September 2013.

FMCG CNX Analysis
 Currently CNX FMCG is just below 200DMA and trend-line is standing as a support. There is a possibility we may see a reversal. Stake rise is not only a problem with HUL, many foreign companies are rising stake in major FMCG companies like Pepsico, GSK and few  in other subsidiaries. It was basically a result of 
SEBI’s and RBI’s change of rules in minimum public shareholdings.

FMCG CNX had formed a Symmetrical triangle now; It had not given any directional breakout.

Analysis on HUL
The Stake rise news had created a fluctuation thus forming a Descending Triangle pattern, which had also given a negative breakout.  Along with it we are also seeing a divergence now, and forming a reversal pattern.

The stock is not an attractive stocks for analyst and many find ITC to be a good bet, as the P/E & Earning for FY15(Expected) to be good comparatively good. Both RSI as well as MACD has shown some divergence.

I am not a pharmabull. But, I want to play it technically. Buy if HUL give a positive breakout. I see this stock to be bullish and the stock is expected to move up to 680/725, if it fails to give any breakout the stock find its support at 484/434.