Technical Check: This wire & cable company which is up 40% in YTD is on track to hit fresh 52-week high; heres why

Finolex Cables Ltd rose more than 40 percent so far in the year 2021 compared to 27 percent upside seen in the Nifty50 in the same period.

The wire & the cable company is also one of the largest manufacturers of electrical and telecommunication cables and has a market capitalisation of more than Rs 7,700 cr on the BSE.

It hit a fresh 52-week high of Rs 557 on the BSE on 13 July but then faced some selling pressure. The stock hit a low of Rs 440 on 23rd August before bouncing back.

The recent price action suggests that the stock is on track to surpass its 52-week high of Rs 557 and hit Rs 560 in the next 2-3 months, suggest experts that translates into an upside of over 10 percent from October 6 closing of Rs 502.

In the beginning of the year, we saw the stock in a consolidation phase for almost 5 months only to see a surge by the end of May 2021 with tremendous volume to give a breakout and attain the peak level of 557 during mid-July 2021.

“After a decent correction, it had bottomed out near the 445 levels to consolidate to form a higher bottom formation pattern in the daily chart and had witnessed another rally to make a lower top at around 530 levels,” Vaishali Parekh, Assistant Vice President - Technical Research at Prabhudas Lilladher Pvt. Ltd, said.

“Thereafter, recently it has again given a short correction to consolidate and make a base near 475 levels. Currently, it registered positive candle formation it has shown signs of improvement moving past the significant 50EMA level of 489 and improving the bias it has made the chart look attractive,” he said.

The RSI is also well placed indicating a trend reversal to signal a buy and has the potential to carry on the positive move further upside in the coming days.

“We suggest buy and accumulate this midcap stock for an upside target of 540-560 keeping the stop loss near 460 levels for a time frame of 2-3 months and yield decent returns from this investment,” said Parekh.

(Disclaimer: The views/suggestions/advices 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.)