Marico on an uptrend

The stock of Marico (₹337.8) surged 5.5 per cent, breaching a key long-term resistance at around ₹336 on Friday. Last week’s 12.7 per cent gain strengthened the stock’s long-term uptrend that has been in place since early 2014. Investors with a medium-term perspective can buy the stock at current levels.

After recording a new high at ₹388 in late August 2018, the stock changed direction and began to fall.

The stock was on a short-term corrective downtrend until it found support at around ₹300 in early October. Taking support from ₹300 in late October, it resumed its up-move. Since then, it has been on a short-term uptrend.

Last week, the stock decisively breached its 200-day moving average and hovers well above that level. The daily relative strength index has entered the bullish zone from the neutral region and the weekly RSI has entered the neutral region from the bearish zone. Moreover, the daily price rate of change indicator features in the positive territory, implying buying interest. There has been an increase in daily volume over the past six trading sessions. Following a sharp rally last week, the stock is poised to test a key resistance at ₹340 with a bullish bias.

Therefore, an upward break of this barrier is possible in the coming weeks.

The stock can continue its uptrend and reach the target of ₹360 with a minor pause at ₹350 in the short to medium term. Investors with medium-term outlook can buy the stock with a stop-loss at ₹330 levels.

(This recommendation is based on technical analysis. There is a risk of loss in trading)

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