Technical Check: Rising volumes in DMart signal further upside; Is it time to buy this Radhakishan Damani-promoted stock?

Radhakishan Damani-promoted Avenue Supermarts (DMart) stock rose over 40 per cent in last one year compared to over 15 per cent upside seen in the Nifty50 in the same period but the rally may not be over yet.

D-Mart with a market capitalization of more than Rs 2.8 lakh cr hit a 52-week high of Rs 5899 on 18 October and then the trend sent sideways. The stock of this retail chain company managed to reclaim its 200-DMA in February which is acting as a crucial support.

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The stock seems to be consolidating in a narrow range but has managed to bounce back from the 200-DMA which suggests buying at lower levels.

Experts advise investors to hold on to the stock if they already have in their portfolio, and if someone plans to put fresh money can wait for a dip. Technical indicators suggest an upside towards Rs 4410-4550 in next 3-4 weeks, suggest experts.

Avenue Supermarts Ltd, which owns and operates retail chain D-Mart, has reported nearly 22 per cent year-on-year (YoY) increase in its standalone revenue from operations at Rs 9,065.02 crore for the third quarter ended on December 31, 2021.

The company had revenue from operations of Rs 7,432.69 crore in the October-December quarter a year ago, Avenue Supermarts informed BSE in a regulatory filing back in January.

Technically, since the past five weeks, the stock continue to consolidate around 61.8% Fibonacci support zone of 3907 levels on a weekly closing basis

“This strong consolidation is also supported with its 200-day SMA (4044) which remains a crucial support zone. Rising volumes in this consolidation range signals increased participation at lower levels,” Rajesh Palviya, VP – Research, Head Technical & Derivatives, Axis Securities, said.

“The daily strength indicator RSI is in bullish mode along with positive crossover which supports rising strength in near term,” he added.

Palviya further added that the above analysis indicates an upside of 4410-4550 levels. Holding period is 3 to 4 weeks.

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