Technical Analysis

Avanti Feeds: Buy

Yoganand D | Updated on March 10, 2019 Published on March 10, 2019


Investors with a medium-term horizon can buy the stock of Avanti Feeds (₹410.8) at current levels. The stock has been in a short-term uptrend ever since it recorded a 52-week low of ₹306 in late January 2019. Last week, it skyrocketed over 18 per cent, breaking out of a falling wedge pattern. This is a bullish reversal pattern; it forms with a wide top and begins to contract as the price move lower like a cone.

The stock has decisively surpassed a significant resistance at ₹350 as well as the 21- and 50-day moving average. Currently, it trades well above these moving averages. There has been an increase in daily volume over the past four trading sessions. The daily relative strength index feature in the bullish zone, backing the up-move, and the weekly RSI has entered the neutral region from the bearish zone. Also, the daily and the weekly price rate of change indicators hover in the positive territory, indicating buying interest.

With the break-out of the falling wedge pattern and the price turnaround on the cards, the medium-term outlook is bullish for Avanti Feeds. Though the stock currently tests a key resistance at ₹420, the bias is bullish. The stock can surpass this hurdle in the ensuing weeks. The medium-term price targets are ₹460 and ₹490 with a minor pause at ₹460 levels. Investors with a medium-term perspective can buy the stock with a stop-loss at ₹385 levels.


Published on March 10, 2019
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