Chart Check: Carborundum Universal hits record highs in February; should you buy, sell or hold?

The stock with a market capitalization of more than Rs 19,000 crore hit a 52-week high of Rs 1,019 on 6th February 2023.

After the recent rally stock may see some consolidation at higher levels but short-term traders can look to buy the stock on dips for a possible target towards Rs 1,300 level, suggest experts.

Traders who are holding the Carborundum can stay put and look to accumulate on dips as the stock is trading near overbought levels.

In terms of price action, the stock price is trading above most of the short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.

The Relative Strength Index (RSI) is at 72.3. RSI above 70 is considered overbought. This implies that the stock may show a pullback. MACD is above its center and signal line, this is a bullish indicator.

“The stock price started its upmove from Rs 251 (October 2020) to Rs 1,029 (January 2022), making a series of higher bottoms and higher tops. During the move the stock continuously traded above the averages,” Bharat Gala, President – Technical Research, Securities, said.

“After that, the stock corrected and made a low of Rs 649 in June 2022. The up move again resumed and the stock started trading above crucial moving averages,” he added.

“A weekly bullish candle, supported by volumes has been formed and stock has given a pattern breakout making a high of Rs 995. The Aroon Up/Down, MACD & Demand Index indicators have generated a primary buy signal,” highlighted Gala.

“The possible targets are Rs 1,300-1600. If the stock price corrects downwards the buy levels are Rs 945-915-891-866-852. Stop loss to be observed in the trade is Rs 800,” he recommends.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of Economic Times)