Asian Paints is in a downtrend since its November 2013 high of ₹560. However, the sideways consolidation between ₹465 and ₹485 over the last two weeks signals a bottom formation of the current downtrend.
The 50 per cent Fibonacci retracement level at ₹468 is providing strong support and preventing a continuation of the fall. The stock is not moving decisively below this level, despite being tested almost every day. On the other hand, a decisive close above the 200-day moving average, currently at ₹478.6 was recorded on Wednesday. The relative strength index indicator is also giving bullish signals. Ergo, technical indicators are suggesting that a sharp reversal is on the cards.
The stock is expected to gain momentum in the upcoming trading sessions.
A rise to ₹492 and ₹495 looks likely now. Short-term traders can go long with a stop-loss at ₹480. The bullish outlook will get negated only if the stock records a strong close below ₹465.
NOTE: The recommendations are based on technical analysis. There is a risk of loss in trading.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.