Shares of ITC Ltd have remained rangebound in the last one year. The FMCG stock has now approached its 52-week low reached in June 2024. This comes after a correction of nearly 22% in the last six months. The stock fell to a yearly low of Rs 381.24 on June 4, 2024.
In the current session, ITC shares were trading on a flat note at Rs 403.65 on BSE. Market cap of the firm stood at Rs 5.06 lakh crore. Total 26.84 lakh shares of the FMCG firm changed hands amounting to a turnover of Rs 108.21 crore on BSE.
ITC shares have reached the bearish zone with the stock trading lower than the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages.
In terms of technicals, the relative strength index (RSI) of ITC stock stands at 40.4, signaling it's trading neither in the overbought zone nor in the oversold zone.
The downtrend in the short term has prompted analysts to adopt a cautious stance on the FMCG counter.
Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One said, "ITC is currently positioned at a multi-month support zone between Rs 400-380, which has historically been a strong consolidation phase for the stock. Based on past price actions, it is highly anticipated that the stock may see a reversal soon, with limited downside from the current levels. In the near term, there hasn't been a noticeable pullback, and the stock is trading below all its significant EMAs on the daily charts. However, a breakout above the Rs 420-425 range is expected to generate momentum for the stock. Investors should consider monitoring this momentum closely. Technically, if the stock surpasses the mentioned resistance levels, it could reverse the current trend and retest the Rs 460-465 zone in the short term. Over a medium-term perspective, there may be potential for movement towards a 52-week high."
Shiju Koothupalakkal, Technical Analyst, PL Capital said, "ITC stock has witnessed a significant erosion recently from Rs 470 level to show signs of bottoming out near Rs 390 zone and with a pullback indicated and the RSI recovering from the oversold zone, has improved the bias to some extent. Technically, a decisive breach above the important 50EMA level at Rs 419 shall improve the bias overall and thereafter, can expect for further rise with targets of Rs 435 and Rs 465 level achievable. One can maintain the stop loss of Rs 390 level as of now."
According to SMC Global Securities, the stock has exhibited a consistent downward trend in recent months.
"From a technical perspective, the stock has sustained its bearish trajectory and is nearing its 52-week low levels. The immediate support level is identified at its 200-day exponential moving average (EMA) on the weekly charts, currently positioned at Rs 365 level. A decisive breach below the 52-week low could potentially trigger further downward momentum, potentially driving the stock toward the Rs 350 level. Conversely, any technical rebound in prices is likely to face resistance within the range of Rs 425-430, limiting upside potential. At present, there are no clear indications of a trend reversal in the stock's price movement. As such, traders are advised to exercise caution and adopt a prudent approach in the short term," said SMC Global.
Ameya Ranadive, Chartered Market Technician, CFTe, Sr Technical Analyst, StoxBox said, "ITC stock has been trading in a broad range over the past year, struggling to maintain momentum amid sectoral headwinds. However, price action suggests ITC is approaching a crucial support zone near Rs 381, where past rebounds have taken place. Mean reversion theory suggests a potential upside toward Rs 475- Rs 492, provided the stock sustains above its support levels. MACD is attempting a crossover, and RSI remains in the neutral zone, signaling a possible shift in momentum."
Ranadive suggests that traders looking for a good risk-reward opportunity may consider accumulating at current levels with a stop-loss at Rs 380, below which the bearish structure would remain intact. "A breakout above Rs 435 could confirm a trend reversal, accelerating the move toward the target zone. Patience is required, but any sustained buying interest could propel ITC back into an uptrend," added Ranadive.