Alfa Laval - A recovery

Infrastrcture based companies had taken a beating in the fall of May and most of them have just started to recover. Examples of Rain Calcining, Era Constructions are some, to name a few. One such company that looks like in the path of recovery is Alfa Laval.

The stock took a nice beating in this correction and stock has retraced from its low of 745 on June 24 to its current level of Rs 800. However the following points to be noted

• The stock has just reached its resistance level of at 8oo and it is time that to note the next movement of this stock. While its support levels seems to be at 745, it looks unlikely that it is in a hurry to fall back, considering the overall movement of interest in infrastructure based companies
• The MACD chart, esp the columns have started to show an upward movement. This is the first sign that the stock is showing some strength.
• RSI, has reacted in a similar manner to the price movement. While a lot can be attributed to the recent price rise, the indicator is only at 40, giving some confidence on the movement.
• The only negative that one can see is in the OBV, the price rise has not seen significant purchases. One needs to be cautious with this sign as there is a possibility of correction only when this is considered in isolation.

However, I like the strength shown in the other indicators and can SLOWLY start building positions in this stock. I like it to be a slow accumulation only for the OBV indicator.