Chart Check: With 24% rise in a month, this hospital stock hits fresh record high; time to buy or book profits?

Max Healthcare, part of the hospital space, hit a fresh record high earlier this week in May 2023 but failed to hold on to the momentum, but the technical chart suggests that the rally may not be over yet, suggest experts.

Medium-term traders can look to buy the stock now or on dips towards Rs 450-500 for a possible target of Rs 750-1,000 in the next 6 months, they say.

The stock price of Max Healthcare rose from Rs 449 as of April 24th, 2023 to Rs 557 recorded on May 24th, 2023 – which translates into an upside of 24% in 1 month.

On the weekly charts, the stock gave a breakout from a trendline that connects the highs of September 2021, October 2022, November 2022, April and May 2023.

The stock has been making higher highs and higher lows on the weekly charts for the past 5 weeks. Although some consolidation cannot be ruled out as it trades around overbought levels, it could be a good medium-term pick.

The Relative Strength Index (RSI) is at 78.2. RSI above 70 is considered overbought. This implies that the stock may show a pullback. MACD is above its center and signal line, this is a bullish indicator.

In terms of price action, the stock is trading well above its short and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.

“Max Healthcare stock price started its up move from Rs 101.65 (Sept 2020) to Rs 472.60 (Sept 2021) making a series of higher bottoms & higher tops. During the move, the stock continuously traded above the averages. & the super trend is continuously in positive mode till date,” Bharat Gala, President – Technical Research, Ventura Securities, said.

“Thereafter, the stock consolidated in the range of 300 & 500 from Sept 21 to April 23. Recently A Weekly Bullish candle has been formed & stock has given a breakout above the trend line connecting Sept 21 and April 23, making a high of Rs 552 which is above the previous 5 Swing highs,” he said.

“The William % R, MACD & KST indicators suggest a positive upmove in the stock. The possible targets are Rs 750-900-1,000 in the next 6 months,” recommends Gala.

“If the stock price corrects downwards the buy levels are (Rs 519-498)-Rs 481-(Rs 465-455) stop loss to be observed in the trade is Rs 430,” he added.

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