Medium to long-term investors can look to buy the stock now or on the decline for a possible 12-month target of Rs 184 in the 9-12 months, they say.
Zomato stock hit a high of Rs 131 on 19th December 2023, but it failed to hold on to the momentum. The stock has rallied more than 20% in the past 3 months, which pushed the stock to fresh highs.
The stock is moving in an ascending trendline pattern and is also trading around the upper Bollinger Band which is a positive sign for the bulls. The stock is in an uptrend and hence any dips can be used as a buying opportunity.
In the short term, there could be some volatility but if investors have a 9–12-month time horizon then they could look at accumulating the stock.
“Zomato’s disruption of the cup and handle pattern caused stock prices to skyrocket, setting a new 52-week high. The daily Relative Strength Index (RSI) is greater than 60, indicating significant upward movement and momentum,” Suraj Bathija, Founder & CSO at AlgoBulls, said.
“Furthermore, the stock closed above the upper Bollinger bands, confirming its upward trend. The stock has consistently respected the ascending trend line on multiple occasions, reinforcing the strength of the trend,” he said.Since hitting its lows in January 2023, the stock has doubled in value. The beta, at 1.50, reflects that 50% of traded volume is delivered on average.
“The net profit margin has shifted from a 30% loss in 2022 to a slightly positive figure in 2023,” highlighted Bathija.
In terms of price action, the stock is trading below 5-DMA but above 10,30,50,100, and 200-DMA on the daily charts, which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 61. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
“Multiple confirmations occurring simultaneously enhance confidence in the prevailing trend. The current stock price (CMP 130) is anticipated to continue rising towards 160, with a stop-loss set at 114,” recommended Bathija.
“If it maintains a position above 171, the new highest level, there’s a likelihood of sustained growth over the next three to four quarters, potentially reaching the all-time high of 184,” he added.
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