Polycab stock outlook: Chart Check: Polycab down by about 10% from highs; buy on dips for target of Rs 3,000
The stock with a market capitalization of nearly Rs 38,000 crore on the BSE hit a 52-week high of Rs 2,820 on April 22, 2022. It has remained resilient which makes it a good buy on dips stock, suggest experts.
Polycab is down by about 10 per cent from the 52-week high recorded last month. It took support near Rs 2,360 levels earlier in May before bouncing back.
It rose more than 5 per cent in a week compared to about a 4 per cent fall seen in the Nifty50 in the same period.
The stock has managed to fight volatility which suggests that there is plenty of demand at lower levels for the stock. It closed 4.6 per cent higher at Rs 2,539 on Friday, May 13, 2022.
Experts see the outperformance to continue which makes it a good buy on dips stock towards Rs 2,320-2,340 levels for a target of Rs 2,770-3,000 in the next 6-month time frame.
On the long-term charts, Polycab continues to move with higher highs and higher lows formation maintaining its strong uptrend.
The stock has shown relative outperformance as it did not correct despite the weakness in the markets. Broadly, the stock has been trading in a range between Rs 2,150-2,750 for the past 8-9 months.
“Currently the stock is down by just 10% from the life highs whereas Nifty is down by 15%. In the current week the stock is bouncing off after taking support at the 20-week SMA (2471) and formed a bullish Engulfing pattern on the weekly charts which indicates a bullish reversal,” Malay Thakkar, Technical Research Associate, GEPL Capital, said.
The RSI indicator plotted on the weekly scale is moving higher after forming a bullish hinge at the 45 mark. MACD is below its Signal and Center Line, which is a strong bearish indicator.
“Going ahead we expect the stock to continue its outperformance and move higher towards Rs 2,770 followed by Rs 3,000 levels. On the downside, Rs 2,320-2,340 zone would act as a support for the counter,” recommends Thakkar.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
