Short-to-medium-term traders with high-risk profiles can look to accumulate the stock for a possible retest of August highs and it could well top 5000 levels in the next 3-4 months, suggest experts.
The stock hit a 52-week high of Rs 4984 on 7th August 2023, but it failed to hold on to the momentum. The stock closed at Rs 4490 on 18 September which translates into a fall of about 10%.
The stock saw a noteworthy rebound from the oversold territory on the monthly charts. On the daily scale, the RSI is at 54.8. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
In terms of price action, the stock is trading below 5,10, and 50-DMA but above 20,30,100, and 200-DMA on the daily charts.
On the weekly scale, the stock retested 3300 levels once in May 2022 and then again in March 2023 which resulted in the formation of a double bottom pattern. It took support above the 200-week moving average on the weekly charts.
“After experiencing a correction of 55% from its peak, the stock found support along a 15-year ascending trendline. This was followed by a breakthrough of the descending trendline, signaling a potential bullish continuation,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.“Furthermore, the Relative Strength Index (RSI) exhibited a noteworthy rebound from the oversold territory, suggesting increased buying interest,” he said.
It’s worth noting that this stock has ventured into the oversold zone on three separate occasions throughout its existence, underscoring the appeal of the current price levels.
ET CONTRIBUTORS“Based on the weekly chart analysis, the stock has formed a double bottom with a rectangle pattern breakout. It seems that the stock has retraced to an internal support level followed by a three-week buying interest,” he said.
“The upward trajectory of the short-to-long-term moving averages underscores the stock’s current momentum. Additionally, the RSI for this stock has exhibited a rebound from the oversold zone, further indicating a potential bullish reversal,” highlighted Shah.
“Considering the aforementioned analysis, it appears favorable to consider buying the stock within the range of 4500 to 4400, with a prudent stop-loss set at 4270 on a closing basis. There’s potential for an upside move towards the 4900 to 5100 level,” he recommends.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)