sensex stock: Chart Check: 4-month range breakout in this Sensex stock can take it to fresh 52-week highs; time to buy?
The auto stock was moving in a broad range of 1,100 points since February, where Rs 8,300 acted as a crucial resistance, while on the downside, Rs 7,200 acted as strong support.
The stock finally witnessed a breakout from this range in July 2022, which is a bullish sign, and the momentum can take it towards Rs 9,250, surpassing its current 52-week high of Rs 9,022 recorded on 10 February 2022.
The auto and auto ancillary space extended its outperformance as the Nifty Auto index is poised for a breakout above its multi-year highs since CY17.
“Within largecap auto space, we remain positive on Maruti Suzuki. The stock remained resilient in recent correction and is witnessing breakout from four months of consolidation, signalling resumption of upmove and fresh entry opportunity,” Dharmesh Shah, Head – Technical, ICICI direct said in a note.
On the price front, the stock is now above the short-term moving average of 50-WMA on the weekly charts, which is a positive sign. It is now trading above all the crucial short- and long-term moving averages of 5, 10, 30, 50, 100 and 200-DMA.
On the weekly charts, the stock has managed to hold above its 52-week EMA since August 2020 and formed a higher low, suggesting inherent strength at elevated buying demand.
“We expect the stock to extend the current up move and head towards Rs 9,250 levels in the coming months as it is the measuring implication of four months range breakout (Rs 8300-7200=1100) added to Rs 8,300,” he said.
The weekly RSI recently generated a buy signal moving above its nine-period average. Thus, it validates the positive bias, says Shah.
He recommends investors to go long for a target of Rs 9,250 and a stop loss of Rs 7,740 in the next 2-3 months. The recommended range to buy the stock is on dips towards Rs 8,350-8,510 levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
