Godrej Consumers Products registers a consolidation pattern breakout! What does it mean for traders?

Godrej Consumers Products registers a consolidation pattern breakout! What does it mean for traders?

by 5paisa Research Team Last Updated: Dec 15, 2022 - 10:16 am 19k Views

GODREJCP has soared over 8% during the initial hour of Tuesday’s trading session

The stock of Godrej Consumer Products has soared over 8% during early Tuesday hours and has registered a strong breakout from its consolidation pattern. An FMCG major, operating in the personal care business, it has seen a fantastic rally in recent times as strong investor sentiment has led to a jump of about 30% from its June low. For nearly a month, the stock had been consolidating in a range of Rs 833-900 but has seen a strong upmove above this level. The volume recorded today is huge and greater than the 10-day, 30-day and 50-day average volume. Interestingly, the stock is above all its key moving averages and has retraced over 50% of its prior downtrend.

Apart from its bullish price structure, the technical parameters also demonstrate strong strength in the stock. The MACD on the daily chart has indicated a bullish crossover, while the OBV has also seen a sharp rise. The +DMI is well above the -DMI. The leading indicator RSI (14-period) is in the bullish zone and above its prior swing high, demonstrating stronger strength. The Elder impulse system has signalled a fresh buy, and Relative Strength (RS) also shows positivity. The stock is currently about 7% above its 200-DMA while 4% above its 20-DMA. In a nutshell, the stock is technically strong and is expected to trade higher following such a strong breakout.

The short-term target levels are Rs 975 followed by Rs 1050. One can maintain a stop level at the 200-DMA level of Rs 840. It provides good trading opportunities for momentum traders and one can include it in their watchlist to track its performance.

Godrej Consumer Products Limited is a Rs 92000 crore market cap FMCG company, mainly engaged in manufacturing personal and household care products. It has a wide range of products which includes hygiene products, hair colour, fragrances, etc.

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