Technical Analysis

Trading pick of the week: Bajaj Consumer Care

Yoganand D | Updated on April 19, 2020

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Investors with a medium-term stance can buy the stock of Bajaj Consumer Care at the current level.

The stock gained 11 per cent, accompanied by above-average volume on Friday, conclusively breaking above a key resistance at ₹150.

Though the long- and medium-term trends are down for the stock, the short-term trend is currently up.

The stock recorded a multi-year low at ₹117.5 in late March and reversed direction, triggered by positive divergence in the daily relative strength index (RSI). Since then, it has been in a short-term uptrend.

While trending up, it had surpassed the 21-day moving average in the initial part of the past week and later breached a vital resistance level of ₹150. This rally has strengthened the on-going up-move.

The daily RSI is on the brink of entering the bullish zone from the neutral region. The weekly RSI is recovering from the oversold territory, which is likely to enter the neutral region in the short term. Further, the daily price rate of change indicator is featuring in the positive territory, indicating buying interest.

The short-term uptrend of the stock has the potential to continue and touch the price targets of ₹170 and then ₹180 in the ensuing weeks. Traders with a medium-term perspective can buy the stock with stop-loss at ₹148.

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Published on April 19, 2020
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