Highly Diversified Company: Larsen and Toubro LT is Stock for Long Term Capital Gains

Larsen & Toubro Ltd, (L&T) hit the NSE on 6 November 1994, since its listing the company has gone through large series of changes and today it is very well diversified conglomerate. There has been lots of dividends, bonus dividends, splits and bonus shares given. This stock has been in the portfolios of the large mutual funds and the FII. Studying the weekly charts, we see that there is much up side possible from the current levels and the stock is firmly trading above the 1760 level and this should be the strong support in the neat term. Also we feel that on should accumulate this stock above the 1760 level for short term target of 1900 and 2100 levels and investors should keep their stop loss below the 1735 levels and one should exit this stock near that levels. We feel the momentum will push this stock to its target levels, for high risk traders they can buy LT in the futures contract as well, but we do not recommend the traders to buy the options contract (CALL/PUT). Technical support for LT now lies at 1760 level and it must be very difficult to break below that level in near term. Studying the technical indicators we see that slow stochastic is now giving us bullish outlook for the near term, also the MACD and RSI is also bullish so this is very good confirmation for the trade setup.

Fundamentally the company is very strong with huge order book which keeps on growing, we are very much confident about the fundamentals of the company. So the LT (Larsen & Toubro) stock will follow the performance of the company in longer term.