ITC, part of diversified FMCG space, rose 25 per cent in about 6 months compared to over 9 per cent fall seen in the Nifty50, and the momentum is likely to continue in the near-term, suggest experts.
The S&P BSE Sensex stock hit a 52-week high of Rs 282 on 20 May 2022 but failed to hold on to the momentum amid muted global cues. It bounced back after hitting a low of Rs 258 last week.
The stock with a market capitalisation of more than Rs 3.2 lakh crore is trading near crucial support levels which could trigger a bounce back. It is also trading near the neckline of a falling trendline on the daily charts.
A close above Rs 268-270 will confirm the breakout that could take the stock towards its 52-week high levels of Rs 280-284, suggest experts in the next 4-6 weeks. The stock closed 1.7 per cent lower at Rs 265 on the BSE on 22 June 2022.
is one of India’s foremost private sector companies and has a diversified presence in FMCG, hotels, packaging, paperboards and specialty papers, and agri-business.
Last month, the FMCG major reported a 11.80 per cent year-on-year (YoY) rise in standalone net profit at Rs 4,190.96 crore for the March quarter compared with Rs 3,748.42 crore in the same quarter last year.
On the price front, the stock is trading above the 5-DMA but below 10,20,30 and 50-DMA. It is trading above the crucial long-term moving averages of 100, and 200-DMA which is a positive sign for the bulls.
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On the technical front, the reading of the Relative Strength Index or the RSI stood at 48.5. RSI below 30 is considered oversold and if the reading is above 70 then it is considered overbought.
The average broker target according to Trendlyne database stands at Rs 319 which translates into an upside of over 20 per cent from Rs 265 recorded on 22 June. The consensus recommendation from 29 analysts for ITC. is strong buy.
“The stock after a recent breakout has been consolidating in a sideways trend and showing signs of a breakout from a falling trend line pattern,” Kunal Shah, Senior Technical and Derivative Analyst at
, said.
“The RSI indicator has given positive crossover on the daily chart confirming the internal strength of the stock. The stock is trading well above its short-term moving averages and is likely to test its all-time high levels,” he added.
Shah recommends traders to buy the stock now for an upside target of Rs 280-284 with a stop loss below Rs 260. The holding period could be 4-6 weeks.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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