Buy Asian Paints, target Rs 1400: Ashish Chaturmohta

Asian Paints | Promoter entity Smiti Holding and Trading Company Pvt Ltd released a pledge on company's 40.38 lakh equity shares.

Ashish Chaturmohta

Asian Paints has seen a base formation between the levels of Rs 1,260 and Rs 1,100 over a period of nine months and witnessed a breakout from the same to hit an all-time high of Rs 1,332 in the month of May.

The price then corrected down to the previous high of Rs 1,260 which has acted as a strong support for the stock and then bounced back. The stock has taken a support at its 50-days moving average and crossed 20-DMA.

In Monday’s session, the stock has shown price momentum with a long bullish candle and good volumes which suggests resumption of the uptrend.

The Relative Strength Index or the RSI on the daily chart has given a positive crossover with its average. The daily MACD has given a positive crossover with its average and moved above the neutral level of zero indicating corrective phase is over.

Thus, the stock can be bought at current level and on dips towards Rs 1,280 with a stop loss below Rs 1,250 and a target of Rs 1,400 levels.