Chart Check: A breakout from 1-year consolidation; MACD in buy mode for this chemical stock; time to buy?

Navin Fluorine International, part of the chemical industry, gave a breakout from the 1-year consolidation range on the weekly charts earlier in August 2022, but failed to hold on to the momentum.

The stock price pared some gains and has now taken support on the upper band of the consolidation pattern followed by a bullish candle which suggests resumption of the upmove, suggest experts.

Short-term traders can look to buy the stock now or on dips for a possible target of Rs 4,650 in the next 1-2 months which will surpass its current 52-week high of Rs 4,553, they say.

The stock price moved in a narrow band where levels around Rs 4,200 acted as a stiff resistance while on the downside support was placed at Rs 3,180 levels on the weekly charts.

The stock has been in an uptrend after it reclaimed its 50-week moving average earlier in July 2022. The stock rose more than a per cent in a week, and over 13 per cent in the last 3 months.

The stock is a low volume stock. Navin Fluorine International’s weekly average delivery volume is 50.37 per cent, Trendlyne data showed as on 2 September.

The relative strength index (RSI) is at 54. RSI below 30 is considered oversold and above 70 is considered overbought, it said.


On the price front, the stock is trading above 5,10,30,50,100, and 200-DMA which is a positive sign for the bulls.

“Stock has given a breakout on the higher side after one year of consolidation implying a bullish continuation sign. Stock has retraced to the upper band of consolidation followed by a bullish candle,” Kapil Shah, Technical Analyst, Emkay Global Financial Services and Trainer- FinLearn Academy, said.

“Technically, it is known as role reversal indicating healthy retracement and resumption of up move,” he said. MACD has given a positive crossover in a positive zone, it supports the bullish development on the price chart.

Based on the aforementioned rationale, stock can be considered as a buy opportunity in the range of Rs 4,280 to Rs 4,200 with a stop loss of Rs 4,100 on closing basis, and the upside potential is up to the Rs 4,650 level

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