The stock price of Tube Investments, a prominent auto component company, has surged by more than 13% in just a month, indicating a significant upward momentum. Experts suggest that this momentum, fueled by the breakout from a cup pattern on the weekly charts, could potentially drive the stock price to reach Rs 3,700. Traders with short-term goals are advised to consider purchasing the stock at its current levels or during minor declines. This strategy is supported by the stock’s trading position above the neckline of the cup pattern, as well as various positive technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD).
The recent rise in Tube Investments’ stock price demonstrates its resilience and potential for further growth within the auto component industry. Starting from a value of Rs 2,781 on May 26th, 2023, the stock quickly surged to Rs 3,147 by June 28th, 2023, representing an impressive gain of over 13% in just one month.
Although the stock experienced a record high of Rs 3,394 on June 23rd, 2023, it was unable to sustain that level. However, it remains above the neckline of the cup pattern, which took approximately six months to form. Additionally, the stock received support above the 50-week moving average in February 2023, highlighting its positive positioning in terms of short- and long-term moving averages on the daily charts.
When examining key technical indicators, Tube Investments’ stock appears to be in a strong upward trend. The daily Relative Strength Index (RSI) stands at 67.5, with values below 30 indicating oversold conditions and values above 70 suggesting overbought conditions. Similarly, the MACD indicator is above both its center line and signal line, further reinforcing the bullish outlook for the stock.
Aditya Thukral, a Senior Analyst at Master Capital Services, emphasizes the breakout of the cup pattern that Tube Investments’ stock achieved after six months of consolidation. Thukral notes the increase in trading volume over the past few weeks, reaching its highest level in the last eight weeks during the breakout. He also points out the stock’s formation of higher highs and higher lows on both short- and long-term charts, indicating a robust uptrend.
Furthermore, previous resistance levels have provided consistent support during any correction in the stock’s price, aligning with the principle of polarity. Thukral recommends that investors set a stop loss below Rs 2,780 on a closing basis, which corresponds to the higher low of the current rally. Additionally, the stock remains comfortably above major exponential moving averages, including the 50-day, 100-day, and 200-day averages.
Based on the cup pattern formed on the charts, Thukral suggests a price target of Rs 3,700 for Tube Investments’ stock, which could be achieved within the next two months. The increased volatility in the market favors a continuation of the larger trend after the consolidation period of six months, thereby providing a favorable long-term opportunity for investors in the stock.
(Note: The recommendations, views, and opinions expressed by experts are strictly their own and do not necessarily reflect the views of the Economic Times).
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