Technical Check: Hungry kya? Signs of reversal on charts suggest Jubilant FoodWorks could see 20% upside

Jubilant FoodWorks Ltd remains volatile but managed to outperform the benchmark indices marginally so far in 2021. Shares of Jubilant FoodWorks rose over 34 per cent so far in 2021 compared to 27 per cent rise seen in the Nifty50 in the same period.

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Jubilant FoodWorks Limited is the master franchisee of Domino’s Pizza in India, Bangladesh, Sri Lanka and Nepal with sole and exclusive rights to own and operate Domino’s Pizza restaurants in these territories.

The stock hits a fresh 52-week high of Rs 4,577 on 13 October but the bears took control and pushed the stock below Rs 4,000. It finally took support near Rs 3,590 before bouncing back.

On the technical front, the stock has been trading below the 30-Days Moving Average of Rs 4,027 for the past 13 days, and 50-DMA placed at Rs 4,017 since October 20.

The chart setup looks attractive with signs of reversal, which could take the stock towards Rs 4,400-4,500 that translates into an upside of about 20 percent from Rs 3,746.65, suggest experts.  

On the technical front, from mid-July 2021, the stock has zoomed from around 3000 levels to touch the peak zone of 4577 levels giving a decent appreciation in 3-months and now along with the market slide, it has witnessed a decent correction.

“The stock seems to have bottomed out near the previous support base of 3590 levels and has indicated consolidation with improvement in the bias,” Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher Pvt. Ltd said.

“The chart setup looks attractive with signs of reversal indicated and immense potential move anticipated on the upside in the coming days. The RSI also has flattened out after the steep fall and is well placed near the oversold zone showing signs of a trend reversal and has indicated strength to rise further in near future,” she said.

Parekh further added that technical parameters support and justify our view for a buy recommendation, and we suggest to buy and accumulate this stock for an upside target of 4400-4500, keeping the stop loss of 3580 for a time frame of 2-3 months and expect for a decent return in this midcap stock investment.

(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.)