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Technical Stock Picks: Jyothy Labs shows signs of turnaround after falling 20% ​​from highs


Jyothy Laboratorieswhich is part of the household products industry, fell about 20% from the highs and found support above the 200-ma on the daily charts.

The stock is trading above crucial support levels; therefore, a technical rebound could be expected. Short term traders can consider buying the stock now for a target above Rs 500 in the next 2-3 months.

The stock hit an all-time high of Rs 553 on January 24, 2024, but it failed to maintain its momentum. The stock closed at Rs 439 on March 28, 2024, which translates to a decline of around 20%.

The stock has seen a steady decline from January 2024 highs, taking it towards 200-DMA on the daily charts. The stock witnessed a rebound after testing Rs 380 levels on the daily charts.

On the weekly charts, Jyothy Labs appears to be facing some resistance around the 20-week moving average for the last 4 weeks, placed at Rs 467. Therefore, a close above the same could trigger further stock purchases.

In terms of price action, the stock is trading above 5,10,20,30 and 200-DMA but below 50-DMA on daily charts.

pictures (3)Agencies

The daily Relative Strength Index (RSI) is placed at 50.1. ROI A price below 30 is oversold and a price above 70 is considered overbought, according to Trendlyne data.

“After seeing a significant decline of 20%, Jyothy Labs stock has reached a crucial support level that could signal a reversal in its downward trend,” said Kapil Shah, technical analyst at Emkay Global Financial Services Limited and trainer at FinLearn Academy.

“This support level is important because it is also the long-term 200-day moving average, which is commonly used by traders and analysts to gauge the health of a stock,” he said .

Despite the previous decline, the stock has built a solid base at this important support level and recently broke a 41-day downtrend line. This is a bullish sign and suggests the stock could continue its upward trend.

“The stock has established harmony across multiple time frames, including the monthly and weekly charts, indicating that it is on a solid foundation. Additionally, a large Tai formation on the monthly chart suggests that there is considerable interest from buyers,” Shah pointed out.

Additionally, on the daily chart, the RSI momentum oscillator has formed a positive divergence, which is a bullish signal indicating that the stock may continue to rise.

“Considering the above factors, the stock presents an excellent buying opportunity in the range of Rs 448 to Rs 453. It is recommended to set the stop-loss at Rs 425 on a closing basis, while the potential increase can be as high. like Rs 520,” recommended Shah.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)


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