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The stock of United Breweries Limited , which has largely been moving in a sideways trend for the past few months, is currently showing fresh signs of upward momentum and in the short-term, the stock is likely to post more gains.
The scrip slumped from its February high of ₹1,356 and by the mid-March, it marked a low of ₹749.5, thereby losing about 45 per cent. It gradually recovered from that level but since early June, the stock entered a consolidation phase i.e. it has oscillating between ₹950 and ₹1,070. But last week, the stock broke out of the upper boundary of the range, opening the door for further strengthening. Also, it made a six-month high of ₹1,166.9 last Thursday, before softening to the current level of ₹1,111.6.
The positivity is supported by the daily relative strength indicator as it has risen along with the stock. Also, the moving average convergence divergence indicator is now signalling fresh signs of bullish momentum. Hence, traders can go long with stop-loss at ₹1,070 with potential target at ₹1,190.
(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)
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