Traders can look to buy the stock for a target of Rs 230 in the next 1-2 months, suggest experts.
The stock rose from Rs 166 as on 19th April 2023 to Rs 190.50 recorded on 19th May 2023 which translates into an upside of about 14% in a month. The momentum helped the stock to hit a fresh 52-week high of Rs 195 on 22 May.
The stock has been in an uptrend since October 2022 after it retested its crucial support at around Rs 130 levels.
The stock did witness a rise towards 190 levels in January 2023 but it failed to hold on to the momentum and found support above Rs 170 or above the 200-DMA on the daily charts.
On the weekly charts, the recent momentum helped the stock to break out from a Descending Triangle pattern with strong volumes which gave strength to the bulls.
Descending triangle is a continuation of a bearish pattern where the next move on either side gives direction to the trend. It is made by connecting a series of lower highs on a particular time frame. Also Read
In terms of price action, the stock is trading above most of the crucial short and long-term moving averages of 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.
The Relative Strength Index (RSI) is placed at 67.7. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, this is a bullish indicator.
“Finolex Industries stock has experienced a change in price polarity around the level of Rs 163, indicating a positive undertone. In early May 2023, the stock broke out of a Descending Triangle Pattern, suggesting a continuation of the upward trend,” Omkar Patil, Technical Research Associate at GEPL Capital, said.
“On the daily timeframe, the stock is trading above its key moving averages of 50, 100, and 200 days EMA, confirming the presence of an uptrend,” he said.
“The RSI on the Weekly timeframe has exhibited a Range Shift, indicating increasing momentum behind the prices. Going ahead we expect the prices to move higher till Rs 230 level where the stop loss must be Rs 175 strictly on the closing basis,” recommends Patil.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of Economic Times)