Kansai Nerolac gives a breakout
Kansai Nerolac Paints Limited is the largest industrial paint and the third-largest decorative paint company in India. It is a subsidiary of Kansai Paint of Japan. In December 2017, Kansai Nerolac was trading at its all-time high levels of Rs 614. However, post that, it entered into a long consolidation phase and remained in that phase until March 2020 before it began its northward journey. After April 2020, this stock never looked back. It ran-up from March 2020 lows of Rs 293.70 to all the way up to Rs 662.70, which is almost 125.64 per cent. Having said, it breached its previous all-time high last week to create a new one at Rs 662.70 before closing the week at Rs 634.35, which again is above its previous all-time high levels.
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Key takeaways:
1. Kansai Nerolac gives a breakout post consolidating for almost three years.
2. Last week, it closed above its previous all-time with increased volumes.
3. The support and resistance are placed at Rs 576 and Rs 663, respectively.
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The above chart is of Kansai Nerolac Paints on a weekly timeframe. As we can see, it closed above its previous lifetime high. Therefore, one can be bullish on this stock. Even the breakout was with increased volumes, which again confirms its trend.
Having said, this stock may witness a pullback in the range of Rs 576.05 to Rs 615.80. Hence, this can be a good opportunity to go long for pullback traders. However, even breakout traders can take the bet but should strictly adhere to the stop-losses. For breakout traders, the pullback can be used as an opportunity to add more and average out their positions.
Last week, the stock opened at Rs 563.85, made a low of Rs 557, and closed at Rs 634.35 after making a high of Rs 662.70.
Disclaimer:
This article is just for understanding purposes and should not be considered as a recommendation. Readers are advised to do their own research before making any investment decision. Further, DSIJ and its authors are not responsible for any kind of losses caused.