Short-term traders can look to buy the stock now or on dips for a possible target of Rs 1,300 in the next 2 months, suggest experts.
Golden Cross is formed when a short-term moving average (50-DMA) crosses above the long-term moving average (200-DMA). It is a bullish indicator that confirms strength in the long-term trend.
On the daily charts of Kajaria Ceramics, 50-EMA crosses 200-DMA this week. Additionally, the stock is finding support above its long-term moving average placed at 200-DMA.
The stock hit a 52-week high of Rs 1379 on 19 January 2022 but failed to hold on to the momentum. It closed at Rs 1,133 on 12 September which translates into a downside of over 17 per cent.
The stock might be trading at a discount when compared to January highs, but it has recouped the majority of its losses. The recent price action suggests that bulls are here to stay.
It rose over 4 per cent in a week, and more than 24 per cent in the last 3 months.
On the price front, the stock is trading above crucial short- and long-term moving averages placed at 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.
The relative strength index (RSI) is at 49.8. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center line, but below the signal line.
“The stock after a short correction has maintained a good support near the significant 200-DMA as well as 50-EMA moving averages of Rs 1,105 levels and has indicated a Golden Cross pattern on the daily chart to anticipate a further upward move in the coming days,” Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher, said.
The RSI also has shown a significant pullback to improve the trend and has immense upside potential.
“With the chart looking good, we suggest traders to buy and accumulate the stock for an upside target of Rs 1,300 in the next 2 months keeping the stop loss of Rs 1,100,” she added.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)