Ganesh Chaturthi pick: Sumeet Bagadia suggests this paint stock to buy | Stock Market News
Source: Live Mint
On the special occasion of Ganesh Chaturthi, Sumeet Bagadia of Choice Broking has suggested Asian Paints stock to buy with a target price of ₹3562/ 3725. “Asian Paints (ASIANPAINT) is currently trading at ₹3244 and has formed a symmetrical triangle pattern on the monthly chart with significant volume, indicating a strong bullish trend,” the Bagadia said in a note.
Choice Broking analyst further went on to say that the breakout above ₹3250 could potentially drive the stock towards the ₹3562 and ₹3725 levels, with immediate resistance at ₹3400. On the downside, the critical support levels are at ₹3100 and ₹3020.
Asian Paints stock ended Friday’s trading session in green. The stock closed at ₹3,266.50 on September 6, versus previous close at ₹3,238.25 on September 5.
The stock has been rallying in past few trading session, propelled by sharp decline in crude oil prices, driven by worries about decreasing global demand.
What’s behind the rally?
Industries that depend significantly on crude oil, such as the paint industry, can gain from a drop in oil prices. Since paint production relies on petrochemicals derived from crude oil, a decrease in oil prices reduces the cost of key raw materials like solvents, resins, and additives.
“Moreover, on the daily chart, the stock has broken out of a rounding bottom pattern, which further indicates strength. The Relative Strength Index (RSI) is currently at 56.9, suggesting an upward trajectory and growing buying momentum. Taken together, these technical indicators suggest that ASIANPAINT has the potential to reach the ₹3562 and ₹3725 targets in the near term,” Bagadia said.
Based on technical analysis and prevailing market conditions, Asian Paints stock appears to offer a promising buying opportunity for those targeting a price objective of ₹3562 and ₹3725, Bagadia believes.
“A prudent strategy would involve considering buying opportunities on dips around the ₹3175 level. However, it is essential to implement prudent risk management strategies to navigate potential market fluctuations effectively,” he said.
