Sensex Stocks: Chart Check: 4-month range breakout in this Sensex stock may take it to new 52-week high; time to buy?

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India Ltd, part of the S&P BSE Sensex index, rose over 1 per cent in the last five sessions and over 11 per cent in one month, leading to a breakout from the 4-month-long consolidation range.

The auto stock was moving in a broad range of 1,100 points since February where Rs 8,300 acted as an important resistance, while on the downside, Rs 7,200 acted as strong support.

The stock eventually saw a breakout from this range in July 2022, which is a bullish sign, and the momentum could take it to Rs 9,250, having crossed its 52-week high of Rs 9,022 recorded on 10 February 2022 .

The auto and auto ancillary space extended their outperformance as the Nifty Auto index looks set to breakout above its multi-year high since CY17.

“Within the largecap auto space, we remain positive on Maruti Suzuki. “The stock remained resilient in the recent correction and is witnessing a breakout from the four-month consolidation, re-initiating upmove and fresh entry opportunities,” Dharmesh Shah, Technical Head, ICICI Direct, said in a note.

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On the price front, the stock is now trading above the 50-WMA short-term moving average on the weekly chart, which is a positive sign. It is now trading above the all important short and long term moving averages of the 5, 10, 30, 50, 100 and 200-DMAs.

maruti suzuki 7 julyagencies



On the weekly chart, the stock has managed to hold above its 52-week EMA since August 2020 and has formed higher levels, which suggests underlying strength on higher buying demand.

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He added, “We expect the stock to extend the current upward move towards Rs 9,250 levels in the coming months as this has a measured effect of four months range breakout (Rs 8300-7200 = Rs 1100) added to Rs 8,300 level Is.”

The weekly RSI recently rose above its nine-period average to generate a buy signal. Thus, it validates the positive bias, Shah says.

He advises investors to take long positions in the next 2-3 months with a target of Rs 9,250 and a stop loss of Rs 7,740. The recommended range for buying the stock is at Rs 8,350-8,510 levels.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)

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