Samvardhana Motherson can rally another 15%, says Choice Equity Broking

Samvardhana Motherson International stock is favourably placed and showing strength on the weekly charts, say analysts at Choice Equity Broking.

Samvardhana Motherson International stock can rally to ₹152 levels, say analysts at Choice Equity Broking. (Photo: Shutterstock)

Rex Cano Mumbai

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Analysts at Choice Equity Broking have a bullish outlook on Samvardhana Motherson International, and expect the stock to target ₹152 levels on the upside. The research team led by Sumeet Bagadia recommended a 'Buy' rating on Samvardhana Motherson International in a recent stock report, with an add up to ₹129 levels based on existing technical chart patterns. On Monday, the stock traded with a marginal loss of 0.5 per cent in late morning deals at ₹131.30 levels. In comparison, the NSE Nifty declined 1 per cent at 23,930 levels. Thus far in the month of May the stock has gained 8 per cent, while the Nifty is down 0.3 per cent. Here's why Choice Equity Broking is bullish on the stock:

Samvardhana Motherson International

Current Market Price: ₹131 Samvardhana Motherson is currently showing strength as the technical structure remains bullish on the weekly time frame, says the brokerage firm in its stock report. "The stock is forming a strong Bullish Engulfing weekly candle near the crucial the 20-Week EMA support zone and is moving higher, indicating renewed buying interest and potential continuation of the uptrend," the report stated. Analysts explain that rising exponential moving averages (EMAs) and steady accumulation near upward sloping support levels further reinforce the positive structure.

(Image source: Choice Equity Broking)

"The stock continues to trade above key EMA levels, reflecting sustained bullish momentum and strength in trend continuation," the report stated. As a trading strategy, analysts at Choice Broking believe that the stock has a strong support placed around ₹118 on the downside, which also aligns with the 20-Week EMA support zone, and is likely to act as a key demand area. Analysts add that key momentum indicators remain supportive, with RSI near 61 showing a rebound from the midpoint and trending higher, signalling improving momentum. The brokerage firm recommends that long (buy) positions can be considered at current levels and on dips towards ₹129. On the upside, analysts have projected target levels of ₹145 - ₹152. The higher-end of the projected target zone implies a potential upside of around 15 per cent from current levels for the stock. The analysts, however, caution that a decisive breach below this support zone, mentioned above, may indicate further decline and weakening of the ongoing bullish structure. Disclaimer: The views expressed by the brokerage/ analyst in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.