Technical Check: Death Cross on charts! This high beta midcap stock eyes 200-DMA for an upward move towards 650-680

Graphite India Ltd rose 26 per cent in the last year compared to 15 per cent upside seen in Nifty50 in the same period, and 20 per cent rally seen in the S&P BSE 500 index.

The stock has been under pressure after it formed a Death Cross on daily charts back in November 2021. A Death cross is formed when 50DMA falls below 200DMA.

Graphite India recorded this bearish crossover in November, and since then the stock has fallen towards Rs 400 in December from Rs 510 on 8 November translates into a fall of over 20 per cent.

However, the recent price action suggests that momentum is picking up in Graphite India; however, a break above 200-DMA placed near Rs 600 is required for bulls to take control.

A close above the 200-DMA will open doors for the stock to head towards Rs 650-680 levels in the next 2-3 months, suggest experts.

The stock is trading well above the 30-DMA which it reclaimed on 1 February, as well as 50-DMA, and 50-EMA placed at 475, and 504 respectively.

The stock after the decent correction from the peak level of Rs 815 recorded on 25 May 2021, has taken support near 400 levels to form a strong base on the daily chart.

Recent price action indicates a good recovery, and the stock seems to be consolidating near the 480-520 zone. A breakout above Rs 600 is required where investors can put fresh money.

“The stock has maintained above the significant 50EMA level of 504 to improve the bias and with the chart looking attractive technically has immense upside potential in the coming days,” Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher Pvt. Ltd, said.

“The significant 200DMA level is situated near the 600 zone and a decisive break above that level would intensify the momentum to fresh new targets,” she said.

Overall, the indicators like the RSI also have shown prominent strength and are well placed to carry on the momentum still further upside thus justifying our view for a recommendation to buy in this stock.

“We suggest investors to buy and accumulate this midcap stock for an upside target of 650-680 keeping the stop loss near 480 levels for a time period of 2-3 months and expect good returns from the investment,” recommend Parekh.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)