United Spirits shares witness 10% rally in 2 weeks. Will the bull last?

Shares of United Spirits (USL) are currently touching their all-time high of Rs. Trading near 1,682.45, has been in a continuous uptrend since November, when the stock bottomed out on the daily chart.

The stock had been making higher highs and higher lows on daily time frames for the past few months, indicating sustained bullish momentum. Recently, it consolidated near its immediate support zone and showed a sharp upward move of around 10% in the last two weeks, indicating renewed buying interest.

“A potential breakout from this consolidation range appears to be underway, further supported by a bounce from critical support levels. The stock has recently reclaimed its short-term and medium-term exponential moving averages (EMAs), reinforcing the bullish outlook,” said Hardik Matalia, derivatives analyst at Choice Broking.

This EMA bounce highlights the continuation of the primary uptrend, indicating strength in the underlying price action. However, the Relative Strength Index (RSI) is currently at 76.54, which is close to overbought territory, indicating the possibility of a timely correction or sideways movement in the near term.

Matalia believes that the stock could offer a buying opportunity if such consolidation breaks down as the stock stabilizes in its trend.

He advised traders and investors to maintain trailing stop-losses to save recent profits or consider partial profit booking at current levels. For new entries, as long as the stock is Rs. A buy-on-dip strategy is recommended till above the 1,450 mark, with an optimal risk-reward setup of Rs. The focus is on key support areas around the 1,550-1,600 range.

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The share touched its previous peak of Rs. close to 1,650 and a weekly close above this level has also been decisive, reinforcing the continued momentum of the stock, said Jigar S Patel, senior manager – technical research analyst at Anand Rathi Shares & Stock Brokers.

Considering the RSI is in overbought territory, it also suggests caution.

“We recommend booking profits at this stage and await a pullback to re-enter more favorable levels. Fresh long positions should be avoided, as the stock is likely to face resistance near current levels,” added Patel.

Around 1:15 pm today, shares of United Spirits fell 2% on the BSE to Rs. was trading at 1,649.45.

(disclaimer: Recommendations, suggestions, opinions and views given by experts are their own. (These do not represent the views of The Economic Times)