IDEA 2 ACT: Colgate Palmolive (India) Limited

Buy - COLPAL

CMP (NSE) 12:53, 17 Sep

1,724.50 80.47%

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FMCG

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Reco. Price

1,081

Period

6-9 Months

Target Price

1,320

upside

22.2%

Stop Loss

940

Last updated on

13 Jun, 2017

Symmetrical Triangle Breakout

Colgate Palmolive (COLPAL) was stuck in a trading range for the past 24-months. Our analysis of weekly charts suggests that the stock has created a contracting wedge. This pattern usually forms during an uptrend as a continuation pattern. With COLPAL's primary trend being upwards, we expect the stock to maintain this positive momentum. Projection of the Symmetrical Triangle breakout indicates that the stock may make a run towards the Rs 1320 level in medium term.

Higher top higher bottom cycle in-tact

Monthly charts analysis indicates that COLPAL has been moving up in a well defined higher top higher bottom cycle. In addition, the price outburst occurred with a large expansion in volume. The stock has also sustained above the resistance zone of Rs 1040 for the second consecutive week confirming the breakout, which in-turn indicates resumption of its primary trend.

Based on the above evidence, we expect COLPAL to resume its northbound journey and move higher towards its potential target of Rs 1320, translating into a 22.2% upside. The whole breakout would stand void if COLPAL cracks below Rs 940 on closing basis.


Index vs Stock Relative Chart

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