Technical Check: Siemens sees breakout on weekly charts; stock likely to surpass 52-week high

Heavy electric equipment maker Siemens Ltd has risen more than 30 per cent in last one year versus over 15 per cent rise seen in the Nifty50. A similar return was seen in the BSE 100 index.

The stock has been an outperformer and investors who are already invested should hold on to the stock as Siemens witnessed a breakout from a 2-month consolidation range on the weekly chars in February, suggest experts.

If the momentum stays intact the stock could well surpass its 52-week high of Rs 2577 recorded on 13 December 2021, to head towards a larger target of Rs 2800 as well as Rs 3190 translates into an upside of 14-30 per cent from Rs 2457 recorded on 18 February.

In terms of shareholding, both foreign investors as well as mutual funds raised their holding in Siemens in the December quarter. FIIs increased their holding from 5.2 per cent in the September quarter to 5.4 per cent in the December quarter.

Mutual Funds also increased their holding in Siemens from 2.16 per cent in the September quarter to 2.72 per cent for the quarter ended December, data from Trendlyne showed.

On the long-term charts, Siemens is showing strength since March 2020 and continued to move with higher highs and higher lows formation maintaining the strong bullish trend.

The stock has shown relative outperformance compared to Nifty and has managed to sustain at higher levels even in the current market weakness.

“Currently the stock trades only 4.8% away from the life high whereas the Nifty is 8% lower from its life highs. On the weekly charts the stock is continuously taking support at the 20-week SMA (2315) and holding above the same with some mild whipsaws,” Malay Thakkar, Technical Research Associate, GEPL Capital, said.

“In the current week, the stock has broken out of a 2-months long consolidation with good volumes and has started moving higher,” he said.

On the indicator front, RSI plotted on the weekly scale is comfortably sustaining above the 50 mark and moving higher indicating bullish momentum in the underlying.

“Going ahead the stock has the potential to continue its outperformance and move higher towards 2800 (61.8% Fib extension 1565-2402) followed by 3190 (100% fib extension 1565-2402),” recommends Thakkar.

He further added that a stop loss of 2315 (Swing low) on a Daily closing basis should be maintained for this trade.