Experts recommend that the stock may consolidate in the short term as it is trading near overbought levels, but investors can look for a target of Rs 5,000-7,000 in the next 6-12 months.
Shares have increased from Rs 3,702 recorded on July 4, 2022, to Rs 4,269 on August 2, which is an increase of more than 15% in a month.
The Relative Strength Index (RSI) is at 70.1. RSI above 70 is considered overbought. This implies that the stock could show a retracement, Trendlyne data shows. MACD is above its centerline and signal line, which is a bullish indicator.
Other parameters like Price Volume Trend help identify the main trend and the William %R indicator reflects the relative closeness to the lookback highs.
In addition, the Commodity Chanel Index (CCI) measures the current price relative to the average price over a given time period, all pointing towards an uptrend.
On the price front, the stock is trading below the 5-DMA, but above the 10,30,50,100 and 200-DMA, which is a positive sign for the bulls.
The share price started to rise from Rs 570 (July 2019) to Rs 4,339 (December 21), creating a series of higher lows and higher highs in an uptrend.
During the move, the stock is continuously trading above the average and the supertrend is in a positive mode. Most of the time, the stock trades in the range of Rs 3,150 to Rs 4,350 between December 2021 and July 2022.
Shares broke out last week after hitting new record highs. The stock’s trend shows continued buyer interest.
“A bullish weekly candle, supported by volume has formed and a new high of Rs 4,431 on the NSE created by the stock, initiating a range breakout on the monthly chart.” Bharat Gala, President – Engineering Research,
“The PVT, WILLIAM %R and CCI (Commodity Channel Index) indicators have generated key buy signals. The achievable targets are Rs 5,000-6,000-7,000 in the next 6-12 months,” he said.
“If the share price corrects downward, the buy levels are Rs (4,195-4,050) -Rs 3,935- (Rs3,817-3,750). The stop loss observed in the trade is 3550,” Gala recommends.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by experts are their own. They do not represent the views of The Economic Times)