Large-cap trending stock: Asian Paints Ltd

The stock of ASIANPAINT has witnessed strong buying interest as it rose over 2% from its day’s low of Rs 3086.

After the gap-down opening, the stock quickly gained momentum and formed a bullish candle on the technical chart, and currently trades at a day’s high. It is up by about 0.60% and is among the top three gainers from Nifty stocks. Since its recent low of Rs 2970, Asian Paints has gained about 7% in six trading sessions. During this period, it has recorded good volumes, justifying the buying interest. The stock trades above its short-term moving averages and is marginally below its 200-Day long-term moving average.

The stock was bound to remain under pressure due to rising crude oil prices. On YTD basis, the stock is down 7%. However, the stock looks to bounce back as it is well-off from its March lows. The crude prices are cooling off and the company is expected to improve its operating marginal costs. Thus, the stock is likely to perform better in the future. The RSI (54.55) is improving and points upwards. The +DMI is above the -DMI and shows positive directional movement. The On Balance Volume (OBV) is on a rise and indicates improving strength from the volume's perspective. On the weekly chart, the MACD has given a bullish crossover and indicates an uptrend in the stock.

Considering its price structure and improving technical indicators, the stock is expected to rise further. A close above the level of Rs 3220 shall bring strong positivity to the stock and can test the level of Rs 3300, followed by Rs 3400 in short to medium term. The company has the largest market share in its sector and possesses strong business practices. One can consider accumulating the stock for long term too. Positionally, it is quite attractive, and traders can expect good gains in the future.

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