Chart Check: Colgate on verge of giving breakout from Symmetrical Triangle; fresh record highs possible

Colgate-Palmolive India, part of the personal care industry, is on the verge of giving a breakout from a Symmetrical Triangle pattern which could open room for the stock to head to fresh record highs towards Rs 1,900-2,400 levels in the next 6-9 months, suggest experts.

Short-term traders can look to buy the stock now or on dips towards Rs 1,580-1,600 levels. Most of the technical indicators also indicate an upside in the near term.

Triangles are formed when the market loses interest in a counter. The stock was seen in a mild downtrend before breaking out from the falling trendline.

A symmetrical triangle is commonly considered a continuation pattecrn. Also Read

The neckline of the pattern was placed around Rs 1,700 levels. Hence, a close above this level could add further momentum to the stock.

The stock price started its up move from Rs 1,065 (March 2020) to Rs 1,823 (July 2021), making a series of higher bottoms & higher tops which is a positive sign.

The stock hit a fresh high of Rs 1,695 on September 2, 2022, but it failed to hold on to the momentum. Momentum suggests that the stock will be able to break above this level.

On the price front, the stock price is trading above the crucial short- and long-term moving averages placed at 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.



The Relative Strength Index (RSI) is placed at 62.1. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.

After hitting a high, Colgate underwent a corrective profit booking, and the stock made a low of Rs 1,375 in January 2022.

“After consolidation, the stock again started its up move making successive higher bottom formations. Recently, the stock made a high of 1660 accompanied by supportive volumes. The stock is due for giving a Symmetrical Triangle breakout,” Bharat Gala, President - Technical Research, Ventura Securities, said.

“The William % R, KST & MACD Indicator suggest a possible firm up Trend. The possible targets are 1900-2300,” recommends Gala.

“If the stock price corrects downwards the buy levels are Rs 1,610-1,580-1,555-1,510. A stop loss to be observed in the trade is Rs 1,470,” he said.

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