Technical charts indicate a recovery in the industrial manufacturing sector after the underperformance in the previous month, with the overall structure remaining robust. A standout stock in the sector, poised for outperformance, is ABB India.
In addition to chart analysis, it is crucial to assess the stock's strength by comparing its performance with the market and peers. Strong stocks demonstrate an ability to rise when the index climbs and slow the decline when the market falls.
According to Kapil Shah, a technical analyst at Emkay Global, an analysis of F&O stocks' sectoral strength on NSE reveals that industrial manufacturing has been outperforming on a weekly and four-week average basis, signaling an upcoming upswing in the segment. Shah noted consistency in the sector across different time intervals.
Within the sector, Shah focused on ABB India, saying, "The stock has touched the 216-period moving average after a 16 percent correction from the top. A potential flag pattern has formed, indicating a bullish continuation."
Technical chart of ABB India | Source: Emkay Global
Strategy Recommendation:
Shah suggests accumulating ABB India scrip in the range of Rs 4,326-4,280 with a stop loss of Rs 4,180 (-3.62 percent) on a closing basis. The upside potential is up to Rs 4630 (7 percent).
At 10.38 am, the stock was trading at Rs 4,317.80 on the National Stock Exchange, up 0.63 percent from the previous close.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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