Stock of the week - Buy Sumitomo Chemical India Ltd For Target Rs. 546 By GEPL Capital
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Observation
* Sumitomo chemicals has been moving in a strong uptrend since march 2020 as it maintains the higher highs and higher lows formation.
* For past 10 months the stock is moving in a rounding bottom pattern which is an accumulation pattern. We can witness a volume pick up at every rise in a stock price which shows bullish undertone of the stock
* The stock is showing relative outperformance as it trades just 8% lower from the life highs whereas Nifty is lower by about 13%. The stock has formed a long Bullish candle in the current week and sustains above the 20 week SMA (407).
* On the indicator front the MACD line is holding above the signal line indicating bullish momentum in the counter.
Inference & Expectations
* Sumitomo Chemicals is moving out of a accumulation pattern.
* Going ahead we expect the stock to move towards 460, a break above which will accelerate the momentum and take the stock higher to 530 levels.
* 405-410 will act as a major support on the downside.
Buy Sumitomo Chemical India Ltd : CMP: Rs 442 Target: Rs 546 (23%) SL: Rs 405
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