The FMCG sector had hit the snooze button and was in a nice slumber until recently. With the index making a new all-time high and stocks moving up above their resistances, this is a good time to take a look at FMCG.
We’ve been absolutely clear from the beginning that in a messy market environment, one has to be careful with regards to their investments.
What we also know, is that FMCG is a defensive sector and tends to lead the market when the sentiment isn’t in the most positive territory.
So let’s take a look at the stocks which are making the cut in the current market scenario.
How about being clear about our levels in the sector first?
Here’s the sector chart that we’re tracking at the moment. On the weekly timeframe, we’re observing an overhead target above 39,600. This is the 161.8% Fibonacci extension of the October 2018 highs to December 2020 lows move.
What’s left to see is if this trend continues along – above its immediate resistance – with the strong momentum that we’re witnessing at present.
Click on the chart to zoom in.
The following are the stocks that we’re tracking in the current move:
Hindustan Unilever
The price has finally managed to move past its 2020 resistance of 2,430. Notice how the 2020 resistance is being taken out now, while most stocks in other sectors are trading at much higher levels compared to the pre-covid levels!
What’s nice to see is a strong bullish candlestick breakout. You can see visually how the overhead supply has been absorbed at this level.
With this move, the price has moved out of the ascending triangle pattern that has been underway for over a year now. The target to track would now be 2,960.
We are bullish as long as the price trades above the risk management level of 2,430.
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