Chambal Fertilisers Share Price Analysis: Will Chambal Fertilisers Reach a New 52-Week High Before Budget 2024? Is it a Good Time to Invest?
Short-term traders are advised to consider purchasing the stock with a potential target of Rs 380 in the next 1-2 months.
The fertilizer stock reached a 52-week high of Rs 324 on 13th December 2022, but was unable to sustain the momentum.
It recently broke out from an Ascending formation. If the stock is able to maintain levels around 280, bulls may regain control and drive the stock price to a new 52-week high.
The stock formed a Double Bottom pattern around 250 first in March and then again in August 2023, and subsequently rebounded. The neckline of the pattern was positioned above 312 levels.
The stock did succeed in breaking out from the pattern last week, but experienced a brief dip this week due to profit-taking – in line with the trend observed in the broader markets.
The stock witnessed a Golden Crossover formation earlier in November, which added further momentum to the stock price. In terms of price action, it is currently trading above most of the key short- and long-term moving averages such as 5,10,30,50,100, and 200-DMA, which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 62.7. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, indicating a bullish trend.
“Chambal Fertilisers was one of the worst underperformers from May 2022. It has corrected over 50% in the two-month time frame, falling from around 516 to a 52-week low of around 260 in July 2022,” stated Kiran Jani CIRA, Head of Technical Research at Jainam Broking Limited.
“After hitting a 52-week low around 260, stock prices underwent a period of time correction. During this period, the price fluctuated between 260 and 300. However, for the past couple of months, it has begun trading in an upward direction and formed a large ascending triangle pattern,” he mentioned.
Since July 2023, prices have been moving in a higher top / higher bottom pattern, resulting in a 23% gain in the last 4 months.
“At present, we are seeing a re-testing of the previous resistance zone with a visible bullish divergence on the chart. The price has broken out from an ascending pattern and has confirmed the same breakout as the recent high,” noted Jani.
“We have been trading above its 50 and 200 SMA for a long time. Additionally, the relative strength index (RSI-14) is showing bullish hidden divergences,” he added.
“So with the Budget, election 2024 approaching, and considering the current chart pattern, we anticipate prices reaching 380 if they hold at 280 levels,” recommended Jani
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)