[ad_1]
From October 2021, the FMCG sector has been getting punched in the gut, which has resulted in the index falling from a high of Rs 42,021 to a low Rs 33,407. This, in turn, has left a lot of traders who bought the dip in FMCG stocks with a sour taste in their mouths. I say this as a lot of business channels were advising to buy the dip when the fall had just begun. Hence, those who bought then will now be sitting with a loss of up to 40% in some equities. Therefore, due to this, I will look at three FMCG stocks that are being discussed heavily on social media.
The first stock I am looking at is Hindustan Unilever (NS:). The stock’s investors have had a rough time since September 2021 as the equity has fallen from Rs 2,860 to Rs 1,901. However, I believe there may be some relief for the investors in the coming weeks. I say this as the equity is at an interesting juncture in the weekly and monthly timeframes.
When we look at the weekly chart, the stock has formed a bullish pattern at the 200-day moving average. Moreover, the price action of the weekly chart has been supported by a higher bullish volume, which is a reassuring sign. Coming to the quantitative side, there is a powerful support zone between Rs 2,000 and Rs 1,920. Therefore, investors can consider this is a good support zone for a stop if they consider going long in the equity.
Coming to the resistance zones in the short term. I expect the equity to face a hurdle once it reaches the resistance zone between Rs 2,140 and Rs 2,240. However, if it breaks this, then the next quantitative resistance is at Rs 2,460. The stock will find it very tough to cross this as at Rs 2,420 is the 200-day moving average on the daily chart. I expect this moving average to take most of the bullishness out of the stock. Thus, I believe all longs will have a profit-making zone until Rs 2,460 in the medium term, after which they will be in a sideways pattern once again.
The second stock I am looking at is Britannia (NS:). Britannia’s downtrend began in September 2021 and has been way steeper than what we saw in Hindustan Unilever (LON:). This is as the equity has fallen by 27% from a high of Rs 4,153 to a low of Rs 3,050. Coming to the chart pattern of the equity, I find Britannia having a stronger long-term price trajectory than Unilever.
I say this as on the weekly chart; the stock has a very strong quantitative support zone between Rs 2,964 and Rs 3,060. Plus, Britannia is a better pattern as the bars present at the quant support zone are rejecting the downside with a rather hefty volume. This downside rejection, combined with the 200-day moving average in the weekly chart and the quant support zone, makes me more positive about the stock’s future price trajectory. Thus, any investor buying for a medium or long term can consider the support zone highlighted above as being key for any up move.
How I would trade the stock depends on the resistance levels of the equity. I say this as the equity has two plausible scenarios as of now. The first scenario is the formation of a box range with a resistance zone between Rs 3,450 and Rs 3,550 being a temporary top for the stock. Whilst, the support being the quantitative zone between Rs 2,964 and Rs 3,060. However, if the stock breaks the resistance zone between Rs 3,450 and Rs 3,550, then it will open up the equity to the second scenario, which will trigger a longer-term up move. A break of this zone would give us an initial target of Rs 3,830 and Rs 4,010.
The last equity has been the talk of the town of late, as many are amazed that ITC (NS:) can have a breakout. Jokes apart the equity’s chart looks interesting and since it is a name that many adore and many make fun off I decided to cover it via a video. I have attached the ITC video below in which I have looked at the prospects of the stock having a breakout, with levels denoting where it ought to be considered as a buy.
Overall, Hindustan Unilever and Britannia are still within the zone where they can enter a medium-term box range or have a long-term breakout. I say this as I do not expect both the names to break the support zones mentioned above. This is as the quant zones I gave are being supported by the price action plus the technicals, which is a good sign.
Good luck trading.
Disclaimer: The investments discussed by Sandeep Singh Ahluwalia may not be suitable for all investors. Thus, you must trust your analysis and judgment before making investment decisions. The report provided is for informational purposes only and should not be interpreted as a proposition to buy or sell any securities.
[ad_2]
Source link
