The stock which reclaimed its 50-DMA on 20 July, placed around Rs 1,724 levels on the daily charts is now acting as crucial support.
Short-term traders who are willing to take the risk can look to enter the stock for a potential target of Rs 2,200 in the next 1-3 months, suggest experts.
The stock with a market capitalization of more than Rs 41,000 crore hit a 52-week high of Rs 3,013 on 7 October 2021 but failed to hold on to the momentum. It closed at Rs 1,754 on 1st August 2022 which translates into a fall of more than 41 per cent – firmly placing the stock in the bear grip.
The stock after hitting the 52-week high last year fell nearly 50 per cent and took support above Rs 1,561 on 20th June before reversing losses. It has rallied more than 12 per cent since then.
On the price front, the stock is trading below 5, 10, 100, and 200-DMA while it is trading above 20,30, and 50-DMA.
The Relative Strength Index (RSI) is at 52.3. RSI below 30 is considered oversold and above 70 is considered overbought. MACD is above its centre and signal line, which is a bullish indicator.
“With decline near to 50 per cent from the top, the index has tested Rs 1,600 support level and formed base. It indicates the state of equilibrium between demand and supply,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer- FinLearn Academy, said.
“Stock has breached intermediate resistance level which shows bulls’ capacity of absorbing the selling pressure. Stock is reacting from near to oversold territory zone,” he said.
On the daily chart, the stock has started to respect the support level and disrespected the resistance, and it has started to form higher high and higher low sequences.
“Based on the above rationale, the stock can be accumulated in the range of Rs 1,833 to Rs 1,750 with a stop loss of Rs 1,650 on a closing basis. On the higher side, the stock has upside potential up to Rs 2,200 level in next 3-4 weeks,” recommends Shah.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)