The title went from Rs 139 on September 16, 2022 to Rs 185 on October 18, which translates into an increase of more than 30% in one month. The share price has seen a strong rally after hitting a low of Rs 92.50 on June 20.
Short-term traders who missed the rapid rally seen over the past 2-3 months may consider buying the stock now or lower for a possible target closer to Rs 275-400, experts suggest.
The stock with a market capitalization of nearly Rs 500 crore hit a 52-week high on October 17 but saw some consolidation thereafter.
The stock may be building on lows towards Rs 150-170 as most technical indicators suggest the upside will continue.
The recent price action helped the stock break out of a descending trend line connecting November 2018 to September 2022 with strong volumes boding well for the bulls.
The stock is up over 20% in a week, 30% in a month and over 60% in the past 3 months.
After the strong rally, it is now trading closer to overbought levels, suggesting that there may be some consolidation in the stock price.
The relative strength index (RSI) is at 71.1. An RSI above 70 is considered overbought. This implies that the stock may show a pullback, according to data from Trendlyne. MACD is above its center and its signal line, it is a bullish indicator.
The share price started its downward trend from Rs 528 (November 2018) to 41.8 (March 2020). The stock price has lowered the formation of the highs and lows during the downtrend.
The stock traded below the averages and attempted to break below them a few times, but failed to do so. The super trend was in negative mode.
“The corrective rally started from March 2020 and the stock reached a high of Rs 181 in May 2021. The super trend turned positive from December 2020. The stock traded in sideways mode from May 2021 to September 2022 and still found support at Rs 90-110. levels”, Bharat Gala, President – Technical Research,
“Recently, the stock gave a range break reaching a high of Rs 187.5 and closed above the trendline connecting November 2018 to September 2022 with supporting volumes,” he said.
“The Aroon up/down, ADX, KST and KST Demand Index and MACD indicators generated a primary buy signal. Possible targets are Rs 275-400 in the next 6-8 months,” Gala recommends.
“If the stock price corrects lower, the buy levels are (Rs 173-165)-Rs 158-(Rs 151-147). A stop loss to observe in the trade is Rs 128” , he added.
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)