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Asian Paints Technical Analysis #85: Buy | Target Rs 1900 | Arijit Banerjee

OUR RECOMMENDATION

CMP#1802.75
IdeaBUY
Buy Range1745 – 1800
Target1900 – 1910
StopLoss*1700
Duration12 – 15 Trading Sessions
Potential Return^5 – 6%
CMP#IdeaBuy RangeTargetStopLoss*DurationPotential Return^
1802.75BUY1745 – 18001900 – 1910170012 – 15 Trading Sessions5 – 6%

# CMP on Sep 23, 2019
* Maintain recommended StopLoss by daily closing basis.
   Once 1st target hit, reset StopLoss at 1851.
^ The returns are calculated based on CMP#

COMPANY OVERVIEW

Founded in 1942, Asian Paints manufactures, sells and distributes paints and coatings for decorative and industrial use in India. Headquartered in Mumbai, the company operates in over 20 countries and has over 30 manufacturing facilities, servicing consumers in over 65 countries. Asian paints Q1 profit jumps to Rs 659.90 crore for the June 2019 quarter, against Rs 558.49 crore in the year-ago period.

Stock Data
NSE CodeASIANPAINT
Sectoral IndexNifty 500
52W High1725.25
52W Low433
Face Value10
Relative Performance_Asian Paints vs Nifty 500

TECHNICAL OBSERVATIONS (WEEKLY)

  • Looking at the weekly chart, stock has seen a spectacular rally from the bottom of around 851.1 (December 22, 2016) and hit a fresh all-time high of around 1820 (September 23, 2019).
  • During this period, the stock price had been moving in an upward moving range and was showing a great amount of strength to sustain the move.
  • Further, the stock has given a breakout above of its crucial resistance, suggest robust upside movement.
Asian Paints Weekly Chart
Asian Paints Weekly Chart

TECHNICAL OBSERVATIONS (DAILY)

  • Last two days, the price action has formed bullish candles with long candlestick body indicating strong positive bias.
  • MACD signal line crossover above 0 indicates buying momentum and probable further rise.
Asian Paints Daily Chart
Asian Paints Daily Chart

MONEY MANAGEMENT AND TRADING RULES

1)  It’s advisable not to enter/exit beyond the recommended range.
2)  Strictly follow the StopLoss as mentioned. Honour it.
3)  Use trailing StopLoss to retain profits.
4)  Diversify trading capital into our other technical recommendations.
5)  Risk only the money what you can afford to lose. Hedge accordingly.

ANALYST SUMMARY

This research analysis is prepared by Arijit Banerjee, CMT, CFTe. An engineering graduate developed an early interest in Trading since the age of 20. He is a Chartered Market Technician (CMT) accredited by CMT Association USA, the leading global authority of Technical Analysis and also has been honoured by Certified Financial Technician (CFTe) from the International Federation of Technical Analysts (IFTA), USA. His contribution to the market research was recognized by SEBI, the Regulatory Body of Indian financial market and given him the registration number INH300006582 as a Research Analyst. Over the years, he has gained experience in Technical Analysis with a demonstrated history of working in different asset classes. Himself as a trader, he has trained and continues training novice and experienced traders to become successful, confident and profitable in the financial market.

Disclosure

The views expressed herein are based solely on information available publicly/internal data/other sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. The recommendations provided herein is solely for informational purposes and are not intended to be and must not be taken alone as the basis for an investment/trading decision. Trading and investing are subject to market risk and the securities discussed and opinions expressed herein may not be suitable for all investors. To read the full disclosure, please click here.

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