Chart Check: This agrochemical underperformer breaks above falling trendline resistance in April


The stock of Rallis India Ltd, which has risen just about 8 per cent in the last year compared to about 20 per cent upside seen in Nifty50, is showing signs of strength based on technical charts.

The stock might have given flattish returns in the last year but has rallied nearly 10 per cent in the last five trading sessions and over 12 per cent in a month which helped the stock to break past falling trendline resistance with rising volumes which indicates strength on the weekly charts.

The stock has also formed a structure similar to a double bottom in March and since then it has seen a steep rise. The stock has been closing with strong gains for the past three weeks – a sign of strength.

Investors holding the stock can remain invested while fresh money can be deployed on dips, suggest experts for a target of Rs 320-340 which translates into an upside of 13-20% from Rs 283 recorded on 13 April, suggest experts.

Rallis, a subsidiary of Tata Chemicals, is a trusted solutions provider for agri-inputs, globally. It has a strong distribution network with over 6,000 dealers and more than 70,000 retailers reaching a vast multitude of India’s farmers covering and exporting to over 58 countries, according to the company website.

In terms of price action, the stock is currently trading above all the crucial short- and long-term moving averages placed at 26, 50, 100, and 200-DMA which is a sign of strength.

Although technicals do suggest overbought positions; hence, any dips towards Rs 255-260 can be used to go long on the stock.

The stock from the pesticide and agrochemical industry with a market capitalisation of more than Rs 5,500 crore hit a 52-week high of Rs 362 back in June 2021 and since then the trend went sideways.

In the recent correction from the life highs of Rs 362 levels, Rallis India took support at its 61.8% Fibonacci retracement level (233).

“In the current week, the stock has broken out of a falling trendline resistance with rising volumes indicating strength with the breakout,” Malay Thakkar, Technical Research Associate at GEPL Capital, said.

“The stock has broken above and is comfortably sustaining above the 20-week SMA (Rs 257). The RSI indicator plotted on the weekly scale is also giving a trendline breakout and confirming the bullish view,” he added.

Going ahead, Thakkar expects the stock to move higher towards Rs 320 followed by Rs 340 levels. He recommends following a stop loss at Rs 255 on a daily closing basis.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)

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