KEC International shares: Chart Check: Down nearly 20% from highs! This heavy electrical equipment maker has given Double Bottom breakout; time to buy?
Short-term investors can look at buying the stock now or on dips for a possible target towards Rs 549, also closer to its 52-week high, suggest experts.
The heavy electrical equipment stock hit a 52-week high of Rs 550 recorded on 26 October 2021, but it failed to hold on to the momentum. The stock closed at Rs 447 on 13 July 2022.
After hitting a record high in October 2022, the stock gave a breakout from a Double Bottom pattern on the weekly charts. It made its first bottom below its 50-DMA, placed above Rs 340 levels in May 2022, and then retested similar levels in June 2022.
The stock gave a breakout from the neckline of the Double Bottom pattern placed at Rs 421 this week, which is a positive sign for the bulls.
The stock bounced back after hitting a low of Rs 362 on 20 June 2022. The momentum helped the scrip reclaim its 50 and 200-DMA, a positive sign for the bulls.
It has rallied more than 7 per cent in a week, and over 20 per cent in a month, suggests Trendlyne data.
Double bottom is formed at the bottom and indicates the end of a falling market. The pattern is formed by two clear bottoms separated by a top.
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The stock had fallen sharply from the high of 550 before it found support at the 200-week moving average.
The proximity to the long-term moving average has induced strong participation from the long-term investors leading to a price rally from the recent low.
“On the daily chart, the stock has given a double bottom breakout, suggesting a rising bullish trend. Besides, the price has moved back into the areas of the previous swing low on the daily chart, indicating the end of the bearish phase,” Rupak De, Senior Technical Analyst at
, said.
“In the recent price chart, a consolidation breakout is visible, indicating a surge in interest in the stock. In the current week, the price has reclaimed its 50-week moving average. The weekly RSI is in a bullish crossover,” he said.
The rounding bottom formation in weekly RSI indicates a strong price momentum for the medium term.
“The above technical set-up looks conducive to strong northwards price movement that may lead the price towards the previous swing high of 549. On the lower end, crucial support is pegged at Rs 400, below which the stock may fall back into consolidation,” recommends De.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
