multibagger stock: Chart Check: Multibagger is coming back from Covid lows! The rally is not over at this automotive supplier

Jamna Auto Industries Ltd, makers of automotive components and equipment, have been giving multibagger feedback from Covid lows over the past two years and technical metrics suggest the rally is not over yet.

The stock rallied after hitting a low of Rs 21 on March 24, 2020. It closed at Rs 128 on July 6, 2022, an increase of more than 500%. The stock has jumped about 50% in the past year, the data shows. Momentum remains strong as the stock moves in a higher and lower formation on the daily charts. It reached a record high of Rs 135.55 on July 4, 2022.

Short-term traders can consider entering the stock now or diving towards Rs 121-116-105 for a target closer to Rs 200 over the next six months, experts suggest.

Price-wise, Jamna Auto primarily trades crucial short- and long-term moving averages such as 5, 10, 20, 50, 100, and 200-DMA, which is a positive sign for bulls.

The Relative Strength Index or RSI is 73.1. An RSI above 70 is considered overbought. This implies that the stock may show a pullback. The MACD is above its center and the signal line, a bullish indicator, according to data from Trendlyne.

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The share price started its rise from Rs 21 (Mar 2020) to 124.9 (Jan 2022), creating a series of lower lows and higher highs. During the move, the stock continuously traded above the averages and Super Trend was in positive mode.

“A slight profit booking followed, and the stock corrected to Rs 95 in March 2022. A higher low at 97.65 followed, and the stock started to rise again. From January 22 to June 22, the The stock traded in a price range (Rs 95-125),” said Bharat Gala, President – ​​Technical Research, Securities.

“A weekly bullish candle, supported by volumes, has been formed. The KST, Vortex & Demand Index indicators have generated a buy signal. Possible targets are Rs 200,” he added.

Gala further added that if the share price corrects lower, the buy levels are Rs 121-116–112-108-105. A stop loss to observe in the trade is Rs 99.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of Economic Times)

Karen J. Nelson