Berger Paints has broken out from a falling trendline on weekly charts, suggesting room for the stock to retest levels closer to its 52-week high of INR710. The stock price may be down by around 9% from its 52-week high, but has recovered by more than 20% since hitting a 52-week low of INR527 on 3 February 2023. The positive momentum has helped Berger Paints breach its 200-week moving average and reclaim falling trendline resistance on the weekly charts. Experts suggest the stock represents a buying opportunity in the range of INR640 to INR630, and further upside potential up to INR700 in the next month.
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The stock price of Berger Paints, part of the paint industry, might be down by about 9% from its 52-week high but recent price action helped the stock to break out from a falling trendline on weekly charts.
The breakout has opened room for the stock to retest levels closer to its 52-week high of Rs 710 recorded on 18th August 2022 in the next 1 month, suggest experts.
The stock closed at Rs 647 on 26th May 2023 which translates into a fall of about 9% from its 52-week highs.
The stock witnessed a smart recovery after it hit a 52-week low of Rs 527 on 3rd February 2023. It has rallied over 20% since then.
The momentum helped the stock to break out from the falling trendline resistance on the weekly charts connecting the highs of November 2021, January 2022, April 2022, August 2022, and May 2023.
The stock also managed to reclaim its 200-WMA placed at Rs 630 level last week. The stock closed at Rs 647 on 26th May 2023.
In terms of price action, the stock is now trading well above most of the short and long-term moving averages placed at 5,10,30,50,100 and 200-DMA on the daily charts which is a positive sign for the bulls.
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Consumer discretionary stocks have started to pick up their movement after a long underperformance. The Nifty50 index is trading in the range of 18,000 to 18,500 levels, but the underlying tone is positive.
Niche sectors like paint have formed a strong structure to do well in the coming time.
“After a 40% decline, Berger Paint stock price has taken support at 540 level which was resistance in the year 2020. Technically, it is known as a change of polarity, and in a given case it is a positive development,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.
“Stock has breached the falling trendline and immediate high which is a bullish continuation sign. After taking the support at the Rs 540 level, the stock is moving in an upward-sloping channel,” he said.
“Other peer stocks like Asian Paint, and Akzo India are in a positive movement. It indicates a positive sectoral move. On a daily chart, the stock has retested the breakout level and long-term moving average,” highlighted Shah.
“Based on the aforementioned rationale, Berger Paint can be considered as a buying opportunity in the range of Rs 640 to Rs 630 with a stop loss of Rs 610. The upside potential can be up to Rs 700 levels in the next 1 month,” he recommends.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of Economic Times)
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