Experts suggest that short-term investors may consider buying the stock right now or taking dips to target Rs 549, which is also close to the 52-week high.
The stock of heavy electrical equipment reached a 52 week high of Rs.550 on 26 Oct 2021. However, it lost its momentum. On 13 July 2022 the stock closed at Rs 447.
After reaching a record high in Oct 2022, the stock made a break from the Double Bottom pattern seen on the weekly charts. It fell below its 50-DMA and placed above Rs.340 in May 2022. The stock then retested the same levels in June 2022.
The bulls are encouraged by the stock’s breakout from the neckline in the Double Bottom pattern at Rs 421 this past week.
The stock recovered from a 20-June 2022 low of Rs 362 The bulls are encouraged by the momentum as the scrip recovered its 50 and 200 DMAs.
Trendlyne data shows that the stock has increased by more than 7 percentage points in a week and more then 20 percent over a month.
A double bottom at the bottom indicates the end to a falling market. This pattern is made by two distinct bottoms, separated by a top.
Stock had fallen sharply from the peak of 550 before it found support near the 200-week moving mean.
Long-term investors have been attracted to the area by the proximity of the long-term moving mean. This has led to strong participation. PriceThe recent low has been overcome by a rally.
“On the daily chart, the stock has given a double bottom breakout, suggesting a rising bullish trend. Besides, the price has moved back into the areas of the previous swing low on the daily chart, indicating the end of the bearish phase,” Rupak De, Senior Technical Analyst at
“In the recent price chart, a consolidation breakout is visible, indicating a surge in interest in the stock. The current week has seen the price regain its 50-week moving median. The weekly RSI is in a bullish crossover,” he said.
The rounded bottom in weekly RSI signals a strong price momentum over the medium term.
“The above technical set-up looks conducive to strong northwards price movement that may lead the price towards the previous swing high of 549. On the lower end, crucial support is pegged at Rs 400, below which the stock may fall back into consolidation,” recommends De.
(Disclaimer) Recommendations and suggestions made by experts are their opinions. These opinions do not reflect the views of Economic Times.