The stock price of asset management company Nippon Life India Asset Management Ltd rose over 23 percent in the first half of 2021, much ahead of Nifty's 13 percent rally in the same period.
After hitting a 52-week high of Rs 385.15 on June 7, the counter has seen consolidation and is currently trading near the crucial support at the 50-Days Exponential Moving Average. History suggests that whenever the stock trades around this short-term moving average it sees a sharp bounce back.
According to experts, this presents a short-term opportunity in the stock for a target of Rs 430-450. This translates into an upside of 16-22 percent from CMP.
On the technical front, the stock had made a low of Rs 249 in September 2020 and thereafter has witnessed a steady and gradual rise, appreciating almost 50 percent.
“The stock has overall maintained above the significant 50EMA levels for most of the occasions in the rising trend to indicate a strong bias for upward thrust. The stock has indicated an ascending channel pattern showing strength with currently bottoming out once again near the significant 50EMA level of Rs 355 and showing a reversal with positive candle pattern indication,” Vaishali Parekh, Assistant Vice President - Technical Research at Prabhudas Lilladher Pvt. Ltd said.
“Last year in the month of February 2020, it has peaked around the Rs 452 level and with the ongoing strong movement, technically, we anticipate the previous peak level to be retested in the coming months,” she said.
Among the indicators, the RSI is currently well placed near 55 levels and has the potential to rise further with an improved bias to justify the upside view.
“We anticipate an upside target of around Rs 430-450 keeping the support near Rs 340 level. We suggest to pick this midcap stock for investment for the next 3 month time frame and expect a decent return as depicted by the strong historic data,” recommends Parekh.
Nippon India MF is one of the fastest-growing mutual funds in India. With a presence across 300 cities in India, the AMC offers clients a well-rounded portfolio of products to meet varying their requirements.
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