Asian Paints | 75% returns | 3 year consolidation breakout

Aug 16, 2024

ASIAN PAINTS

Monthly time frame
Stock in consolidation since Dec 2020
Stock riding above 20-, 50- & 200-month moving averages
Stock touched 50 MMA in May 2024, almost 15 years after previous occurrence
Stock has closed above 20- month moving average after 2.5 years
RSI > 50
MACD crossover about to occur, signalling bullish momentum

Weekly time frame
Stock in the verge of breaking out of the white resistance trend line
Stock has touched 20-, 50- & 200-week moving averages at the same time
RSI > 55
MACD signalling bullish momentum
Volumes have been good from Jan – Aug 2024, signifies buying has been done

Daily time frame
Stock recently bounced from the orange support line in May 2024
Stock following the rounded bottom formation
Stock riding above 20-, 50- & 200-day moving averages
20DMA has just crossed 200DMA and golden crossover also is approaching
RSI > 55
MACD is above the 0 line, considered bullish

Conclusion
Entry: 3,050
Stop Loss: 2,850
Target 1: 3,500
Target 2: 4,222
Target 3: 5,250

Fundamentals
ROCE = 37 {Ideal > 15}
ROE = 31 {Ideal > 15}
Stock PE (57) = Industry PE (54) {Stock not overvalued compared to Industry}
Int Coverage = 33 {Ideally > 2}
CF Operations / EBIT = 0.88 {Ideal value > 1}
Debt to equity = 0.13 {Ideal value < 1}
Promoter stake has remained consistent over the years > 50%

Aug 30, 2024

Trade active

Trade is active

Nov 11, 2024

Trade closed: stop reached

Stop loss breached in weekly close. Exit