Hold on to Asian Paints

B. Krishnakumar

THE stocks from the paint industry have not performed too well in recent times.

Most industry majors are confined to a relatively narrow range. The share price of market leader Asian Paints has fluctuated in the Rs. 220-295 band in the last few months.

The Asian Paints stock touched a high of Rs. 313 (adjusted for bonus) in January, but has since been on a major decline. There is no evidence of the completion of this medium-term downtrend. However, in the short term, the Asian Paints stock could rule firm and move up to about Rs. 300 from the current perch at Rs. 258.6. On the other hand, a decline below Rs. 250 would blunt the possibility of a rally to Rs. 300 level.

Given this backdrop, shareholders could remain invested as the stock still has potential to move up further in the short term. Fresh exposures may be deferred for the time being. Existing exposures may be pared if the stock moves to the target zone of Rs. 300. Alternatively, a decline below Rs. 250 would also warrant downsizing of existing exposures in the stock.

(Note: Recommendation in this column is based entirely on the technical analysis of the past price behaviour of the company concerned. There is a risk of loss in trading.)