Sunday, February 28, 2010

Technical Analysis - Asian Paints

Asian Paints (Rs 1,809.5): Asian Paints is in a gravity-defying run over the last two decades. The decline in 2008 too did not cause a deep gash in the stock price nor could it impact the positive long-term outlook.

It was one of the first to move to a new life-time high in 2009 and is currently poised over 30 per cent above its 2008 peak.

It is apparent that the stock is in a fresh leg of its long-term bull market since March 2009. Key support for the medium-term is at Rs 1,500. Investors with a long-term perspective can therefore continue to hold the stock with stop at Rs 1,450.

A sideways consolidation between Rs 1,500 and Rs 2,050 for a few months would be construed as positive and will build the platform from which the stock can move to a new peak.

However decline below Rs 1,500 can drag the stock lower to Rs 1,350 or even Rs 1,200. Investors with a short-term investment horizon can hold the stock with a higher stop at Rs 1,640.

Source BL


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