Bullish Pennant in Asian Paints
There are a very few stocks that make it to every investor’s portfolio and Asian Paints has always been one such stock. As the name suggests, Asian Paints is into manufacturing, selling and distribution of paints, coatings, products related to home decor, bath fittings and other related products. Such a vast product line offered by the company keeps the order book strong and robust throughout the year, thus, makes it nearly immune to the seasonality effect. However, there have been specific periods during the year, when this stock has been noted to perform really well and one such joy ride is just around the corner for the company. Generally, the consumption of company’s products tends to rise during the pre-Diwali season, which in turn is strongly reflected by the surge in its stock prices.
The aforementioned charts is an EOD (end-of-day) chart of Asian Paints, capturing daily price movements observed in the stock prices. The stock prices have been going through a time correction lately, thereby, not allowing the prices to showcase a definite trend. This has continued for more than 3 months now, and the outcome of which has been a strong Bullish Pennant formation, backed-up by a healthy upward rally. The expected outcome of this would be a powerful breakout once it crosses the levels of 1162, where the resistance line of the Bullish Pennant has been place along with the Pivot Level. A break above these levels will deem the counter fit for entry, post which it may face some resistance near 1175-1180. Upon overcoming these levels, the stock will begin it journey on the upside, thereby offering handsome returns to its investors. A successful breakout, may soon take the stock near the levels of 1220-1250 which will mark the first leg of the positive rally and will continue further. We may witness some support near 1100-1110 followed by 1080, in case the stock sees a downside.
The overall bias on the stock remains positive over a period of next 3-6 months.