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    Chart Check: A breakout from rounding bottom pattern suggests this brewery stock will surpass Rs 1,100 levels

    Synopsis

    ​​The stock also bounced back above the multi-year bearish trendline, which is a bullish sign. The stock rose more than 5% in a week and 13% in the last 3 months.

    United SpiritsTIMESOFINDIA.COM
    United Spirits Ltd, part of the breweries and distilleries industry, has been on buyers’ radar, which helped the stock to give a breakout above the neckline of the rounding bottom pattern on the weekly charts.

    A rounding bottom is formed when the market sentiment shifts from bearish to bullish at a steady pace. (Also Read: Why rounding bottoms & tops formations are more predictable and reliable than V-shaped formations)

    The stock also bounced back above the multi-year bearish trendline, which is a bullish sign. The stock rose more than 5% in a week and 13% in the last 3 months.

    If the momentum stays intact, the stock could well surpass its 52-week high of Rs 957 recorded on 14 January 2022.

    Short-term traders can look to buy the stock now or on dips for a possible target of Rs 1100 in the next 2-3 months, suggest experts.

    In terms of price action, the stock price is trading well above the short- and long-term moving averages of 5, 10, 30, 50, 100 and 200-DMA, which is a positive sign for the bulls.
    image (2)ETMarkets.com

    The Relative Strength Index (RSI) is at 69.4. RSI below 30 is considered oversold, and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal Line, a bullish indicator.

    United Spirits has shown a bounce above the multi-year bearish trendline, which the prices had respected since March 2015.
    “In the latest week, the prices have given a breakout from the Rounding Bottom pattern indicating the continuation of the prior uptrend,” Omkar Patil, Technical Research Associate at GEPL Capital, said.

    “On the Daily Timeframe, the Bollinger Band have started to expand, which points towards the rising volatility of the underlying for an up move,” he said.

    “RSI on the weekly timeframe has shown a breakout which reflects the rising momentum in the stock. Going ahead, we expect the prices to go higher till the level of 1100 in next 2-3 months where the stop loss must be 860 on a closing basis,” recommends Patil.

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




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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