Raymond was trading 5 percent higher in late trade on April 27 amid talk of acquisition by Godrej Consumer, as reported by Moneycontrol, continuing its northward journey.
The stock has surged 58 percent after rising to Rs 1,109 on March 28. It touched the day’s high of Rs 1,756 on April 27 and trading at Rs 1,694, at the time of writing this article.
Raymond has largely seen a one-way rally, barring small intermittent corrections. It has formed a bullish candlestick on the daily charts with a long upper shadow, indicating a bit of profit-taking after a consistent run- up for several weeks.
On the weekly charts, the stock formed a large bullish candlestick for a second week, making higher and highs higher lows for the fourth week running.
On the monthly scale, it formed a robust bullish candle with a higher top and higher bottom formation.
The momentum indicator relative strength index (RSI 14) at 82 also points to a positive trend but the stock seems to have reached the overbought zone. The moving average convergence divergence (MACD) climbed above the zero line.
On the weekly scale, RSI at 69 has given strong positive crossover, and even MACD gave a positive crossover above zero line, which is a positive sign.
Given the one-way rally and RSI at overbought levels, experts advise profit-booking and dips to buy the stock.
"In the current month itself, the counter has given a one-sided over 50 percent return. Additionally, on a daily scale, RSI is placed at 82 levels which is an extremely overbought situation, so one should wait for a dip till Rs 1,540-1,550 for fresh longs," Jigar S Patel, Senior Manager - Equity Research at Anand Rathi said.
One can book profits and be in the wait-and-watch mode, he said.
Raymond has given a decisive breakout of downward sloping resistance trendline adjoining highs in December and February, with high volumes. It is trading above all key moving averages (21, 50, 100 and 200-day exponential moving averages), which is a positive sign.
"It is advisable for traders to capitalise on any downward movements by purchasing the stock, as long as it remains above the critical support level of Rs 1,530," Vidnyan Sawant, AVP - Technical Research at GEPL Capital said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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