Technical Analysis

Stock trading call: Buy Radico Khaitan

Yoganand D | Updated on January 19, 2020 Published on January 19, 2020

 

The stock of Radico Khaitan was in the limelight last week. It decisively breached a significant medium-term resistance at ₹332 last Monday by gaining 5.4 per cent. For the week, the stock surged 7 per cent with good volume. This breakthrough provides investors with a medium-term perspective an opportunity to buy the stock at current levels.

Following an intermediate-term downtrend, the stock found support at ₹260 in June 2019, which is a 52-week low. Subsequently, it changed direction and started to trend upwards.

 

 

 

But the key resistance at ₹332 halted it in August. Thereafter, it remained in a sideways consolidation phase in a wide range between ₹290 and ₹330 until last week. Recently, the stock also breached its moving average compression (21-, 50- and 200-day moving averages) at around ₹320, and is now trading well above these averages.

There has been an increase in daily volumes over the past two week.

The daily relative strength index (RSI) features in the bullish zone, while the weekly RSI has just entered this zone, strengthening the bullish momentum.

Besides, the daily as well as the weekly price rate of change indicators feature in the positive terrain, implying buying interest.

The medium-term outlook is bullish for Radico Khaitan. It has potential to trend upwards and reach the price targets of ₹400 and ₹415 in the medium term, with a minor pause at ₹400, while trending up. Investors can buy with stop-loss at ₹330.

 

Published on January 19, 2020
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