We believe that the stock is likely to continue with its positive momentum and head towards Rs 1550 in the medium-term, says Dharmesh Shah of ICICIdirect.com.
The share price of ABB has been oscillating in an upward sloping channel over the past two years (drawn adjoining lows of January – December 2016 of Rs 955 -1018, respectively).
Recently, the prices retraced 80 percent of the last leg of the up move (Rs 1129 – 1517), placed at Rs 1206 levels coinciding with the lower band of the rising channel. As a result, the stock formed a higher low, signifying the conclusion of an ongoing corrective phase.
Going ahead, we expect the stock would hold the key value area of Rs 1320-1330 and resolve higher, as it is the lower band of the last two week’s consolidation and 50 days EMA placed around Rs 1316 levels.
Among momentum oscillators, the weekly 14-periods RSI has been inching upward after recording bullish crossover, indicating an acceleration of positive momentum in the short term.
Based on the above technical evidence, we believe that the stock is likely to continue with its positive momentum and head towards Rs 1550 in the medium-term as it is the price parity of the August-September 2018 up move (Rs 1150 to 1517) added to the October 2018 low of Rs 1190 project upside towards Rs 1550 levels.Disclaimer: The author is Head Technical at ICICIdirect.com Research.The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.