Technical Check: Cummins India rallies over 100% in a year; could surpass 1000 in 2-3 months
Cummins India, a leading manufacturer of diesel and natural gas engines, has been on buyers’ radar as the stock rallied more than 100 percent in the last year compared to about 50 percent rise seen in the Nifty50.
Cummins India with a market capitalisation of nearly Rs 25000 cr hit a fresh 52-week high of Rs 1,065 back in September but then faced selling pressure which pushed the stock towards support near Rs 870 levels.
The stock is now showing signs of a rebound and the technical indicators confirm bullish bias in the stock that could take it towards Rs 1050-1080 in the next 2-3 months that translates into an upside of 20 percent from 12 October closing price of Rs 899.
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Since November 2020, the stock has witnessed a decent spurt from the levels of 430 with regular swings in this year, as well. This indicates that the trend has been on the upside with a rising channel pattern. On the daily chart, the stock is trading above the significant 200DMA level.
“Recently, the stock has corrected well from 1064 levels and bottomed out near the lower trendline support of the channel pattern at 875 zone and has shown improvement in the bias,” Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher Pvt. Ltd, said.
“The RSI indicator has also indicated a trend reversal to signal a buy and has got strength and potential to rise further in the coming days. The chart looks attractive and one can make a fresh entry in this midcap stock to anticipate further upward move from here on and yield a decent return from this investment,” she said.
Parekh suggests investors buy this stock for an upside potential target of 1050-1080 keeping the stop loss near 850 level for a time frame of 2-3 months.
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.
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