The breakout has opened room for the stock to head towards 200 levels in the next 3 months, suggest experts. Short-term traders can look to buy the stock around 160.
The stock rose from Rs 111 as of 20th July 2023 to Rs 158 recorded on 20 October 2023 which translates into an upside of over 40% in just 3 months.
It hit a 52-week high of Rs 167.55 on 17th October 2023 last week, but it failed to hold on to the momentum. The stock witnessed mild consolidation to close at Rs 158 on Friday, 20 October 2023.
On the monthly charts, the stock breached the downward-sloping trendline resistance with strong volumes which is a positive sign for the bulls.
“From 2021 to the present, the NMDC stock experienced its highest volume ever recorded, indicating that traders and investors were closely monitoring the stock. During the past three months, it has increased, with each month’s volume being higher than the one before it,” Suraj Bathija, Founder & CSO at AlgoBulls, said.
“When the highs of November 2011 and May 2021 are connected, the stock has broken through the downward trend line with a huge green candle and high volume,” he said.
On the weekly charts, the stock broke out from an Inverted Head and shoulder pattern. The neckline of the same was placed around 150 levels on the weekly charts.
“On the weekly chart, the inverted head and shoulders pattern also developed, and the stock closed above its neckline,” highlighted Bathija.
“The stock’s three-week stay in a limited range in the month of September 2023 was a significant contributor to the trend,” he said.
The price began to rise the following week after making a close above that constrained range. On all three time frames’, RSI values—monthly, weekly, and daily—are above 60, signalling a strong rally.
“If the stock rises further, it may be possible to buy it now at cmp 162, with a target range of 215 to 235 in the coming quarter and a stop loss of 148,” recommended Bathija.
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)