Chart Check: Time to buy? ITC likely to surpass 500 levels and hit fresh record highs in 3 months
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The level of Rs 450 is acting as a crucial support for the ITC stock price and a bounce back could be possible around these levels as various technical parameters suggest that bulls are here to stay.
The stock is down by about 0.5% in a week compared to over 2% gain seen in the S&P BSE Sensex in the same period. It rose more than 4% in a month compared to 9% gain seen in the benchmark index.
Short term traders can look to buy the stock now or on dips for a possible target above 500 once Rs 499 is breached – which is the July record high.
The stock hit a record high of Rs 499 on 24 July 2023 but it failed to hold on to the momentum. The stock found support around Rs 450 which is also the neckline area of the Cup and Handle pattern.
A close above 500 could take the stock towards 540 levels, suggest experts. However, the time horizon could be around 3 months.
“ITC stock has recently retraced to 38.20% when considering the low of 2023 and the high of 2023. Post-retracement, it exhibited a notable breakout above the cup and handle candlestick pattern, supported by above-average volume and a long green candle,” Suraj Bathija, Founder & CSO at AlgoBulls, said.Furthermore, both daily and weekly Relative Strength Index (RSI) levels are higher than 60, indicating robust upward momentum. The weekly RSI consistently remained above 50, underscoring a strong uptrend throughout the year 2023.
“The technical signals, ITC has consistently outperformed the Nifty 50 index. This sustained outperformance reflects the stock’s resilience and potential for continued growth,” highlights Bathija.
Fundamentally, the company’s financials are impressive. The revenue of the company has witnessed a commendable growth of almost 17% compared to 2022.
Moreover, the net profit has surged by approximately 23% in 2023 compared to the previous year.
“Considering the above factors, we strongly recommend a buy decision for ITC. The current trend is clearly upward, supported by strong momentum. The confluence of multiple technical and fundamental confirmations at the same time adds conviction to this upward trend,” he said.
Target Levels:“The stock is anticipated to continue its upward trajectory, with an initial target of 458. A sustained break above 500, the peak of July 2023, could further propel the stock towards 540 in the coming quarter,” recommended Bathija.
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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