Technical Analysis

Emami (₹290.8): Buy

Yoganand D BL Research Bureau | Updated on June 25, 2019 Published on June 26, 2019

Investors with a short-term perspective and contrarian view can consider buying the stock of Emami at current levels. The stock has been in an intermediate-term downtrend since encountering a key resistance at ₹670 in January 2018. But, after marking a multi-year low at ₹246 on Monday, the stock bounced up from the intra-day low.

Witnessing buying interest, the stock gained 8.8 per cent with good volume on Tuesday. The stock has formed a hammer candlestick pattern in the weekly chart which is a bullish reversal pattern. The daily relative strength index is recovering from the oversold territory and the weekly RSI continues to feature in the oversold territory which also indicates possibility of a recovery.

With the stock reversing higher from a key support at around ₹250 and formation of a hammer candlestick pattern, the near-term outlook is bullish for the stock. It has potential to trend upwards and reach the price targets of ₹302.5 and ₹309 in the near term.

Traders can buy the stock with a stop-loss at ₹284.5.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get

This article is closed for comments.
Please Email the Editor