Short-term traders can look to buy the stock now for a possible target above 1,000 levels in the short to medium term, suggest experts.
The consumer durable stock rose from Rs 859 as of December 15, 2023 to Rs 947 recorded on 22nd December 2023 which translates into an upside of over 10% in a week.
The stock hit a 52-week high of Rs 957 on December 20, 2023. The stock rose more than 11% in a month.
The momentum helped the stock to breakout from a 200-point consolidation range on the weekly charts where levels above 930 acted as a stiff resistance while on the downside the stock found support above 730. The stock closed at 947 for the week ended December 22.
On the monthly charts, the stock formed a Bullish Mat hold candle pattern which suggests that the momentum is on the upside.
Bullish Mat hold candle pattern is a 5-candlestick pattern which is formed in an uptrend. It started with a bullish candle followed by 3 small candles which signifies consolidation, and the fifth candle is a large candle.
AgenciesVoltas will also benefit from the overall bullish trend seen in the consumer durable sector, suggest experts. The index also broke out from a 2-year consolidation patch.
“The S&P BSE Consumer Durable index has broken out after a two-year consolidation patch and has been trading in a rising channel for nearly 14 years,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.
“Despite an intermediate correction, the market seems to have terminated in the moving average band, pointing to a potential bullish continuation,” he said.
AgenciesIn terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 81.9. RSI above 80 is considered strongly overbought. This implies that stock may show pullback. The daily MACD is above its center and signal Line, this is a bullish indicator.
“Voltas stock has experienced three major declines in the past decade, and each time it has dropped around 42%. However, the most recent decline of 44% suggests that the fall is likely to end, based on the stock’s previous history,” highlights Shah.
“Additionally, the stock has taken support at a horizontal line and formed a base for one year, which can be considered an accumulation zone. This is a sign that the stock is stabilizing,” he said.
“Furthermore, the stock is forming a Bullish Mat hold candle pattern, which is a positive development and could indicate an upward trend in the near future,” Shah explained.
“Based on this rationale, the stock looks promising for accumulation within the range of 950 to 930 level. However, if the stock falls below 880 level, the bullish view will be negated. If all goes well, the upside potential could be up to 1050/1150 level,” he recommends.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
