Technical Analysis

UltraTech Cement Ltd (₹3,740): Buy

Akhil Nallamuthu | Updated on May 28, 2020

The stock of UltraTech Cement can be considered by traders looking for short-term opportunities. The stock has broken out of a crucial resistance and is showing signs of further upside.

The stock, which has been consolidating between Rs 3,250 and Rs 3,640 since mid-April, breached the upper boundary of the range on Tuesday. The 21-day moving average (DMA) has crossed over the 50-DMA, hinting at a bullish trend reversal. Adding to it, the daily Relative Strength Index (RSI) has moved above the midpoint of 50 and is pointing upwards.

The Moving Average Convergence Divergence (MACD) indicator, in an upward trajectory, has moved into positive territory. Moreover, an ascending triangle pattern on the daily chart stands confirmed and indicates a potential rally from the current levels.

Considering the above factors, traders can take a bullish view on the stock and initiate fresh long positions on declines, with stop-loss at Rs 3,640. The near-term targets can be Rs 3,860 and Rs 4,000. Notably, according the ascending triangle pattern, the stock might even appreciate to Rs 4,280.

Supports: Rs 3,640 and Rs 3,600

Resistances: Rs 3,860 and Rs 4,000

Published on May 28, 2020

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