The smallcap stock rose from Rs 469 recorded on July 29 to Rs 615 as on 30 August 2022 which translates into an upside of over 31 per cent in August alone.
The stock consolidated in a narrow range near Rs 30 levels back in 2020 from where it staged a smart bounce back which took the stock to a high of Rs 570 in October 2021 but it failed to hold on to the momentum.
The stock hit a low of Rs 359 in March 2022 on weekly charts before bouncing back but found resistance above Rs 570 once again in April 2022. The stock consolidated in a range of Rs 578-350 since October 2021.
A sharp rally in August 2022 helped the stock to break out of the above range on the weekly charts which is a positive sign for the bulls.
Short-term traders can look to buy the stock now or on dips for a target of Rs 850 in the next 6-12 months, suggest experts.
The stock rose more than 20 per cent in a week and over 40 per cent in the last 3 months. The stock is trading around overbought levels. Hence, some consolidation cannot be ruled out.
The relative strength index (RSI) is at 84. RSI above 80 is considered strongly 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 156 (April 2021) to Rs 570 (October 2021), making a series of gap-up formations suggesting strong buying interest.
The Aroon Up/Down, MACD, and Demand Index Indicator suggest a possibility of strong upmove.
‘Aroon’ is used to measure the direction of market trend and spot potential reversals, and the demand index reflects buying and selling pressure in the stock.
“During the move, as seen in charts the stock always took support of averages and super trend is in positive mode till date,” Bharat Gala, President – Technical Research,
“The firm uptrend since April 2021 suggests a strong bull grip in the stock. Recently the stock gave range breakouts (October 2021 to August 2022) and made a high of Rs 550 above previous swing high of Rs 524,” he said.
“The stock has never breached the averages and gap up levels during the uptrend. The possible targets are Rs 850. Stop loss to be observed in the trade is Rs 415,” recommends Gala. If the stock price corrects downwards the buy levels are Rs 515-494-477-460-450.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)