The stock of Pidilite Industries, which is on a long-term uptrend, lost momentum in October last year after reaching ₹2,500 levels. This level blocked the rally and following this, the stock was witnessing a gradual decline in price.
Although there was no trend reversal, the stock saw its price fall towards the key support of ₹2,200. Thankfully, this support arrested the decline in early December and since then, the scrip is on a recovery mode.
The stock gathered enough momentum and consequently, it breached the resistance of ₹2,500 on Tuesday with strong volumes. As it closed at ₹2,638 on Wednesday, it can be assumed that ₹2,500 is decisively breached and this opens the possibility of another leg of uptrend. Yet, there could be a dip to ₹2,560 before making fresh highs.
Considering the above factors, traders can initiate fresh longs at current levels and accumulate on a dip to ₹2,560. Place initial stop-loss at ₹2,500 and revise it upwards to ₹2,600 if the stock crosses over ₹2,700. Liquidate the longs at ₹2,800.
(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.