Technical Stock Pick: This tea & coffee maker hits record highs in March but quickly loses momentum; should you buy?

Short-term can look to buy the stock now for a possible target above 1500 levels in the next few months, suggest experts.

The stock rose from Rs 948 recorded on 12th December 2024 to Rs 1215 as on 12th March 2024 which translates into an upside of over 28% in the last 3 months.

The momentum pushed the stock to fresh record highs of Rs 1269 as on 7th March 2024, but it failed to hold on to the momentum. The stock witnessed some selling pressure which was largely in line with the muted trend seen in benchmark indices.

The Nifty50 fell by about 1% since 7th March while the Tata Consumer stock was down by over 4% from its record high in the same period.

In terms of price action, the stock is trading below the 5 and 10-DMA but it is still trading above 20,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.

“Tata Consumer stock demonstrates a robust price structure, with a clear uptrend observable since October 2001, characterized by higher highs and higher lows over the long term,” Vidnyan S. Sawant, Head Research at GEPL Capital Ltd., said.

“The stock is maintaining its position above the congestion zone and is trading at its all-time high, indicating significant strength in the current uptrend,” he said.

The daily Relative Strength Index (RSI) is at 77.5. RSI above 70 is considered overbought. This implies that stock may show pullback. The daily MACD is above its center and signal Line, this is a bullish indicator.

The trend support is further strengthened by the stock's ability to remain above both the 12-week and 26-week moving averages.

“A bullish crossover on the MACD indicator occurring in positive territory adds momentum to the ongoing upward trend, affirming the bullish sentiment surrounding Tata Consumer,” highlighted Sawant.

“When analyzing Tata Consumer against the Nifty using a ratio chart, a continuous upward trend is evident, suggesting sustained outperformance compared to the broader market,” he said.

“Looking forward, there is an anticipation of further price ascent towards the 1518 mark. It is recommended to set a stop-loss at 1163, strictly based on the closing basis,” recommended Sawant.

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