V-Guard Industries, a leading household appliance company, has experienced a remarkable surge in its stock price, reaching a fresh record high. Technical analysis reveals that the stock has formed an inverted head and shoulder pattern, indicating the potential continuation of its upward trajectory. While the stock is currently trading well above key moving averages, the Relative Strength Index (RSI) suggests an overbought condition, implying the possibility of a pullback. Nonetheless, the MACD indicator remains bullish. Experts predict further price increases, setting a target level of Rs 340 with a stop loss at Rs 255.
During June 2023, V-Guard Industries, part of the household appliance sector, witnessed a rally of over 12%, propelling its stock to reach an all-time high. The chart pattern suggests that the rally may not be over yet. Notably, the stock recently broke out of an inverted head and shoulder pattern, surpassing a swing high of Rs 281 recorded on 1st June 2021. On 30th June 2023, the stock closed at Rs 285.
In just a month, the stock rose from Rs 251 on 31st May 2023 to Rs 282 on 30th June, delivering an impressive upside of 12.3%. On 28th June, it even hit a record high of Rs 290.90.
Within a week, the stock saw a more than 5% increase, driven by strong momentum. This surge has now placed the stock in an overbought zone and could potentially lead to some consolidation.
From a price action perspective, V-Guard Industries’ stock is trading comfortably above crucial short and long-term moving averages, such as the 5, 10, 30, 50, 100, and 200-day moving averages. This signals a positive outlook for the bulls.
Considering the daily Relative Strength Index (RSI), it currently stands at 80.4. RSI values above 80 are typically associated with a strongly overbought condition. Consequently, a pullback may be in the cards.
Meanwhile, the Moving Average Convergence Divergence (MACD) is above its center and signal line, which is a bullish indication according to Trendlyne data.
Omkar Patil, a Technical Research Associate at GEPL Capital, noted that V-Guard Industries’ stock has undergone a significant correction without establishing a pattern of lower highs and lower lows since its peak in late October 2019. This suggests a well-executed correction and the establishment of a strong foundation over the past four years. As such, Patil believes that the stock has the potential for an upward trajectory after successfully navigating the correction phase. He also highlighted the emergence of an inverse head and shoulder pattern, signaling a breakout and indicating a continuation of the upward trend.
Patil recommends that investors keep an eye on the momentum indicator RSI, which has shown a breakout reflecting rising momentum in prices. He expects the prices to move higher towards the Rs 340 level, with a strict stop loss at Rs 255 on a closing basis.
It’s important to note that the recommendations, suggestions, views, and opinions given by experts are their own and do not necessarily represent the views of the Economic Times.
In conclusion, V-Guard Industries’ stock has experienced a significant rally, reaching a new record high. Technical analysis suggests that the upward trend may continue, despite potential indicators of an overbought condition and the possibility of a pullback. Experts remain optimistic about the stock’s future performance, with a target level set at Rs 340. Investors should exercise caution and closely monitor price movements to make informed investment decisions.
This news article provides a balanced view of V-Guard Industries’ stock, incorporating different perspectives and opinions. By adhering to the guidelines, the article maintains journalistic integrity while offering valuable insights to readers.
