ITC, NTC Ind: Strategies for Cigarette-related stocks after duty hike

ITC stock needs to sustain over Rs 350 to embark a new bull-run

Shares of cigarette-related companies will be in limelight starting today, as the Finance Minister raised Natural Calamity Contingent Duty (NCCD) on certain cigarettes by 16 per cent in her Union Budget 2023 speech.

As soon as this news poured in, all the cigarette related stock experienced a sudden dip fall. However, shares of ITC went to hit a new all-time high as it successfully managed to recover from the impact. Previous historic peak of ITC was at Rs 361.45.

Barring Godfrey Phillips India, VST Industries and NTC Industries were also able to recoup their losses and were seen trading with gains between 0.50 per cent to 1 per cent. Godfrey Phillips India shares traded with a cut of 3 per cent. 

Here’s the technical outlook amid hike on the cigarette duty:-

ITC Ltd (ITC)

Likely target: Rs 400 (needs to sustain over Rs 350)

Upside potential:  12%

While ITC shares have claimed a new territory, by recording a fresh historic peak of Rs 365.70, the trend needs to sustain over the key level of Rs 350, to ascertain the upward bias. On the downside, the upward bias has a support of Rs 320 levels. Until this support continues to bolster the positive sentiment, the probability of ITC sustaining over Rs 350 appears strong.  A robust sentiment may propel the counter towards Rs 400 levels.  CLICK HERE FOR THE CHART

Godfrey Phillips India Limited (GODFRYPHLP)

Outlook: Breakout over Rs 2,000

There is a price divergence of the Relative Strength Index (RSI), suggesting weakness to emerge on the upside, as per the daily chart. The counter may breakout, if Rs 2,000 is surpassed and held with resolute volumes. The upside rally may then see Rs 2,300 and Rs 2,400 levels. As of now, the trend is indecisive, rather sloping downward.  Bears may turn up if the stock falls beneath Rs 1,600 levels. CLICK HERE FOR THE CHART

NTC Industries LTD

Outlook: Range bound trade

Shares of NTC Industries are broadly trading in the range of Rs 95 to Rs 75 levels. Any decisive breakout from this range would depict a clear picture. Breakout could see a rally of 30 to 40 points on the either side. The technical indicator, Relative Strength Index (RSI), has a hurdle at 60 value. A close over this mark shall trigger an upward bias, with stock price action rallying to breakout on the upside.  CLICK HERE FOR THE CHART

VST Industries Limited (VSTIND)

Outlook: Overall trend is weak

The stock is trading below the crucial average of the 200-day moving average (DMA), currently set at Rs 3,239-mark. And unless the cross surpasses this mark, the underlying sentiment may not favour the bulls. The initial hurdle is also at Rs 3,120. Support for the counter exists at Rs 2,800 levels. The current trend looks fragile and until the counter finds a suitable ground, it’s better to avoid. CLICK HERE FOR THE CHART