Gujarat State Fertilizers & Chemicals (GSFC) rallied 5.5 percent on May 17 and formed a long bullish candlestick pattern with small upper and lower shadows on the daily charts with above-average volumes. Also, the stock has seen a breakout of the Bullish Flag pattern, which generally indicates the possibility of further sharp upmoves in coming sessions.
The stock settled at Rs 180.55 on the NSE, the highest closing level since April 6 last year. After forming a Tweezer-bottom-like pattern towards the end of March this year, the stock has broadly been making higher highs, higher lows pattern, which is a positive sign.
Further, there was a golden crossover of 50 EMA over 200 EMA in the early part of May month and the stock has been trading well above all these key moving averages, which also seems to support bullish sentiment.
Momentum indicators also showed positive bias with the RSI (relative strength index 14) at 72 levels and MACD (moving average convergence divergence) remaining above the zero line with an upward direction.
Hence, considering all the above factors along with Cup and Handle-like pattern formation (which is a bullish continuation pattern), GSFC may reach around Rs 200 mark in the coming days, which is around its record high. If the same levels sustain then there could be further upmove with intermittent correction and consolidation going ahead, whereas Rs 130-140 levels can be support levels, experts said.
GSFC, the stock, has exhibited strong bullish momentum since it opened with a gap-up on April 26. It rallied 48 percent since April 21 this year.
"On the monthly chart, it has successfully broken out of a bullish pattern known as "Cup and Handle." Sustaining this breakout will be crucial for further upward movement. Additionally, the stock has witnessed above-average volumes during the breakout, indicating that the momentum is likely to persist," Viraj Vyas, Technical & Derivatives Analyst | Institutional Equity at Ashika Stock Broking said.
In the near future, he feels the stock is expected to reach the Rs 200-mark. Looking at a longer time horizon of 2-3 years, it is anticipated to double from its current level, while key positional support for the stock can be found at Rs 140, he said.
GSFC's stock price has reached its highest point in the past 52 weeks, signaling a positive trend. "In Wednesday's trading session, it broke through its previous high, indicating the potential for further bullish momentum. This upward movement in price has been accompanied by a remarkable surge in trading volume, reinforcing the positive outlook for the stock," Foram Chheda, CMT, Technical Research Analyst and founder of ChartAnalytics.co.in said.
Consequently, there is a possibility for the upward momentum to continue, potentially reaching levels around Rs 193, she added.
It's important to note that if the price drops below Rs 168, it may indicate a negative shift in the trend and would act as stop-loss levels, she feels.
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