Analyzing India

EMAMI Limited - Up for a Trend Reversal?


Emami Limited is one of the leading and fastest growing personal and healthcare businesses in India, with an enviable portfolio of household brand names such as BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm, Fast Relief and Kesh King.

The stock price of EMAMILTD.IN has been under-performing the general markets for the past couple of months. After testing high near 599, the stock has remained in a corrective decline. It tested its lows near the 336-mark and witnessed a sharp pullback from there. However, a few signs have emerged that point towards a likely reversal of this downtrend.

The current price is facing a resistance from a falling trend line, which is drawn from 588 and joins subsequent lower tops. A small flag pattern is observed as the stock price consolidates in a narrow range. The 50-DMA, which is presently at 406, also runs along this falling trend line.

The RS Line, which has been falling over the past couple of months, can be seen reversing its trend. While the stock prices consolidated, the On-Balance Volume (OBV) has seen a sharp up-move. This is a bullish sign, acting as a confirmation of volumes. The daily MACD remains in buy mode, while weekly MACD has shown a positive crossover and is now bullish, trading above its signal line. The weekly PPO has turned positive. RSI is seen breaking out of a formation while also marking a higher bottom. Additionally, RSI is showing a bullish divergence against the price.

The stock is expected to see some upward revision in prices over the coming days. If the present pattern is resolved on expected lines, the stock may test the 450-470 levels. Any move below 350 will be negative for the stock.

Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst

Disclosure pursuant to Clause 19 of SEBI (Research Analysts) Regulations 2014: Analyst, Family Members or his Associates hold no financial interest below 1% or higher than 1% and have not received any compensation from the Companies discussed.

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Milan Vaishnav
About the author: , CMT, MSTA is a qualified Independent Technical Research Analyst at his Research Firm, Gemstone Equity Research & Advisory Services in Vadodara, India. As a Consulting Technical Research Analyst and with his experience in the Indian Capital Markets of over 15 years, he has been delivering premium India-focused Independent Technical Research to the Clients. He presently contributes on a daily basis to ET Markets and The Economic Times of India. He also authors one of the India's most accurate "Daily / Weekly Market Outlook" -- A Daily / Weekly Newsletter,  currently in its 15th year of publication. Milan's primary responsibilities include consulting in Portfolio/Funds Management and Advisory Services. His work also involves advising these Clients with dynamic Investment and Trading Strategies across multiple asset-classes while keeping their activities aligned with the given mandate. Learn More
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