The commercial vehicle maker bounced back after hitting a low of Rs 33 on 23 March 2020. It closed at Rs 162 on September 7 which translates into an upside of about 400 per cent.
The stock has rallied over 5 per cent in a week, nearly 12 per cent in a month and more than 50 per cent in the last 6 months which suggests that bulls are leading gains.
Recently, the stock gave a trendline breakout on the monthly charts which helped it to hit a high of Rs 169.40 on 6 September 2022. The stock was trading around Rs 167 back in May 2018.
Most of the technical indicators also suggest a possible up move in the stock price. On the price front, the stock is trading above key short- and long-term moving averages of 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.
The relative strength index (RSI) is at 71.3. RSI above 70 is considered overbought. This implies that stock may show pullback, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.
The stock price started its up move from Rs 11.82 (August 13 to 167.5 in May 18) making a series of higher bottom formations which auger well for the bulls.
“A technical correction in the form of profit booking followed and after the Covid event, the stock made a low of Rs 33.70 in March 20. Value buying followed and the stock gave a V-shaped recovery up move and made a high of Rs 153.40 in November 2021 but failed to cross its all-time high,” Bharat Gala, President – Technical Research,
“Recently, the stock gave trend line (Connecting May 2018 & August 2022) breakouts and made a high of Rs 166 above its previous swing high of Rs 153.4, accompanied by supportive volumes and expected to crossover May 2018 high of Rs 167.5,” he added.
The Vortex, ROC & WILLIAMS % R Indicator suggest a possible up move. “ROC measures the % change in the price of one period with the price N periods ago. William % R reflects the level of close relative to high –low range of given period of time,” explains Gala.
He sees a possible target of Rs 250-325 in the next 6 months. If the stock price corrects downwards the buy levels are Rs 153-145-140-133-129. A stop loss to be observed in the trade is Rs 120, added Gala.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)