FMCG Sector On The Move

JC Parets
December 16, 2020

Nifty FMCG broke above its long-term resistance last week, moving out of a more than two-year consolidation. While the selected-few large caps from the sector have performed well with the rest of the market in the run up so far, we believe that the rest of the sector is on its way to play catch up.

Let’s take a look at the sector and see what the charts have to say.

Nifty FMCG has broken above its resistance and seems poised to perform well going forward. With the 200-DMA sloping upwards and the RSI in the overbought territory, bullish momentum can be seen in this sector.

On a relative basis to Nifty 100, the Nifty FMCG sector has begun to bounce back from multi-year support. So if ever there was a time for FMCG to rally, this is it!

Now let’s take a look at some actionable ideas at current levels that look attractive on the long side for the next few weeks and months.

As mentioned in our latest post of Three Charts of the Week, we think ITC is ready to perform going forward above levels of 205 for a target of 235.

Next up, we have Avenue Supermarkets which has only recently broken above its resistance and is consolidating at current levels. A consolidation at new highs, without breaching the lows is a good sign of the strength in the counter along with the bullish momentum being indicated by the RSI. We are bullish on this stock above 2550, for a target of 3015.

Emami Ltd has performed well since the bounce back in the market. While it has reclaimed its November 2018 highs, we believe that the current pull-back is a good opportunity. We are bullish above levels of 400, for a target of 470.

Gillette is another stock to keep on the radar. The stock is consolidating at current levels after breaking above its resistance. With the indicator moving towards the positive territory and the price making higher highs and higher lows, we could see further movement on the up side. We are bullish above 5660, for a target of 6800.

VBL is another counter that has moved above its zone of resistance and is currently trading at all-time highs. Bullish above 870, with a 1110 target.

One stock that is recovering from lows is Bajaj Consumer Care. The RSI is moving into positive territory indicating bullish momentum. We are bullish above the level of 195, with targets of 245 and 265.

The next stock we’re looking at is Venkys. This stock is reversed its trend of lower highs and lower lows and has breached its resistance as it consolidates at current levels. The RSI too has moved close to overbought territory indicating the bullish momentum. Our risk management level in this stock is 1450, with a target of 2230.

As FMCG finally makes a move, these are some of our actionable ideas at current levels. In addition to the above stocks, we also have a list of stocks that we’re keeping on our watchlist. As the broader market rally extends, subdued sectors are beginning to participate as well. If FMCG continues to hold on to its support, we could witness a long overdue rally in this sector!

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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