This FMCG major has defied market sentiment; Is it a good buy for investors?
Nestle has seen strong buying interest at lower levels despite weakness in the market.
The Indian indices were on a free fall as investors fled away from the risky stocks. Meanwhile, FMCG sectors, which is considered one of the most defensive and safe bets during volatile conditions, rose to support the market.
The stock of Nestle India has seen strong buying interest on Monday as investors decided to choose resilient stocks during these volatile conditions. The Nestle shares have surged nearly 2% backed by good volumes. With this, It has become the top gainer from the Nifty 50 stocks. After correcting about 8% from its recent swing high, the stock has formed a base near its 200-DMA level. Interestingly, the stock trades above its long-term moving averages, which indicates that the stock is quite favourable for the long term. The Maggi maker has jumped nearly 9% in the past 3 months, making it one of the most resilient stocks in the market.
The technical terms show good strength in the stock for the medium term. The 14-period daily RSI is above its prior swing high and indicates improving strength. The ADX points northwards, which is a positive sign. The MACD is about to indicate a bullish crossover. In a nutshell, the stock is technically strong and has the potential to scale higher levels in times to come.
The domestic institutions have consistently increased their stake in the past few quarters. The company has posted decent results in recent times, having reported a 16% jump YoY in sales. For value investors, the stock is at an attractive level and can consider placing their bets for the long term.
Nestle India Limited is engaged in the food business. It manages brands like NESCAFE, MAGGI, KitKat, BarOne, Alpino, Munch, Eclairs and POLO. With a market capitalization of over Rs 1,78,000 crore, it is one of the established players in the Indian FMCG industry.
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