Buy ITC, target Rs 320: Aditya Agarwal

A vendor holds a cigarette pack printed with a picture bearing likeness to Chelsea's soccer player John Terry at his roadside stall in New Delhi January 3, 2012. A blurry picture of Terry appears on Gold Flake cigarette packets across the country with an anti-smoking warning was created by the Indian government's Directorate of Visual Publicity and got approved by the health ministry last year. The advertisement has triggered complaints from Terry's representatives, local media reported. REUTERS/Parivartan Sharma (INDIA - Tags: HEALTH SPORT SOCCER) - RTR2VU99

Looking at the weekly chart, ITC is in a consolidation phase since the past few months which resulted into a formation of Double Bottom pattern on the charts.

Recently, the stock saw a decent traction and in that optimism, the stock confirmed its breakout from the Double bottom pattern on daily chart on a closing basis.

On the weekly chart, the said pattern will be confirmed once it starts sustaining above Rs 291. The weekly RSI (14) entered inside the 60 levels which indicate that the stock is on the verge of a breakout.

The weekly Bollinger band has started expanding and is indicating that the volatility is likely to increase in the coming weeks. Hence, we recommend traders to buy this around Rs 283 to Rs 280 with a price target of Rs 320 and a stop loss placed below Rs 266.

Disclaimer: The author Head Technical Research, Way2Wealth Brokers Pvt. Ltd. The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.