Recently, the stock prices had witnessed a long-term breakout by closing above its 2019 high of Rs 650. However, as the prices had already rallied from the recent low of Rs 556 levels, the oscillators were in a deep overbought zone and hence prices entered a phase of consolidation. On the weekly chart, prices have now formed a strong bullish candle indicating a resumption of the primary uptrend.
On the daily chart, the momentum oscillator, i.e, the RSI smoothened after cooling off from its overbought zone, which is pointing back northwards and has given a fresh buy signal with its average line supporting the buy call. In addition, the price structure continues to remain in a bullish cycle i.e. in ‘higher top higher bottom’.
Hence, with all the above technical parameters, we sense a strong outperformance by this frontline counter and hence recommend a buy at current levels for a target of Rs 710 over the next 14 sessions. The stop loss should be fixed below Rs 640 levels.
[Sameet Chavan, Chief Analyst, Technical and Derivatives, Angel Broking Ltd]
