The breakout has opened room for the stock to head higher and may even breach 1100 levels to hit fresh record highs in the next 2-3 months, suggest experts.
The FMCG stock hit a 52-week high of Rs 1101 on 6th July 2023, but it failed to hold on to the momentum. The stock touched a record high of 1138 on 30th August 2021.
After hitting a fresh 52-week high in July 2023 the stock witnessed a price-wise correction. It took support above the 50-week moving average placed around 990 levels in October 2023 and bounced back.
The stock rose more than 6% in a month. It has shown a positive closing in the past 3 out of the last 4 weeks and the momentum remains strong.The market has been quite volatile lately, with the Nifty index consolidating around the 21,000 level after a 12% rise in just 6 weeks.
“Although the momentum oscillator RSI reading is currently at an overheated 83 level, there is no sign of a reversal yet. However, to minimize risk, it is recommended to choose a defensive sector with a good technical structure,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.
Regarding price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 61.5. 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.
“Among the stocks in the FMCG space, Godrej Consumer Products has a strong technical set up. The stock has taken support at the role reversal level after a 12% correction, and the recent low also confluence with 54 EMA mid-term rising moving average,” highlighted Shah.
“Moreover, the stock has breached the falling channel and the recent high, indicating a bullish continuation sign,” he said.
“Therefore, investing in Godrej CP seems like an excellent opportunity. The stock can be bought in the range of 1047 to 1030 range with a stop loss of 990 level. The upside potential can be up to 1150 level,” recommended Shah.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)