HUL, ITC, Tata Consumer: FMCG sector on verge of breakout; stay invested

ITC stock is struggling to conquer the resistance of Rs 215 to Rs 220 levels. The downside support stays at Rs 200

Shares of Hindustan Unilever and ITC from the FMCG pack actively participated in Monday's stellar rally at the bourses amid reports that consumer goods' firms, which are facing inflationary pressure on their key raw material inputs, are considering marginal hike on their products price to offset it.

Some FMCG companies like Marico and others have already gone for price hike, while some which include Dabur, Parle and Patanjali are closely monitoring the situation. FMCG players have been trying to absorb the price increase of raw material inputs such as coconut oil, edible oil and palm oil, but they are unlikely to hold the prices of their commodities for a long time as that will impact their gross margins. READ MORE ABOUT IT HERE

On the BSE, HUL shares advanced 2 per cent in the intra-day trade and was among the top three gainers on the benchmark Sensex index at 11:00 am. That apart, ITC, Colgate Palmolive, and Tata Consumer Products also gained between 0.5 per cent to 2.5 per cent. In comparison, the S&P BSE Sensex was ruling 335 points, or 0.7 per cent, higher at 49,117 levels.

That apart, a Business Standard report highlights that fast-moving consumer goods (FMCG) garnered $5.14 billion worth of flows from FPIs in calendar year 2020, as sooner-than-anticipated business revival and improving sales figures helped Asian Paints, Titan, Dabur, and Tata Consumer stocks to post lifetime highs. READ HERE

In this backdrop, here's how sector giants look on charts:

NIFTY FMCG: A breakout above 33,000-mark has opened a rally towards the uncharted territory of 37,000 from a medium-term perspective, as per the weekly chart. This move may see strong traction, supported by gradual swell in volumes, reflecting the interest of market participants. The closing basis support comes at 34,000-mark. The Relative Strength Index (RSI) is consistently showing positive momentum in the overbought territory above 70 value. This suggests the underneath strength is likely to stay in favour of the bulls. CLICK HERE FOR THE CHART

Hindustan Unilever Ltd (HINDUNILVR): The "Higher high, higher low" formation shows a positive bias, as per the daily chart. This move may uphold the upward momentum till the support of Rs 2,370 is defended with heavy volumes. The immediate trend, however, is exhibiting mild weakness as RSI trades in the negative crossover. That said, the gap-up trade on January 11 may change the negative bias. An uptick above Rs 2,450 may trigger a rally in the direction of Rs 2,520 and Rs 2,560 levels. CLICK HERE FOR THE CHART

ITC Ltd (ITC): This stock is struggling to conquer the resistance of Rs 215 to Rs 220 levels. Unless a confirming trend occurs above this range, the stock may move in either direction. The downside support comes at Rs 200-mark. The RSI and Moving Average Convergence Divergence (MACD) are also trading in a negative crossover. This illustrates mild negative sentiment on the stock. CLICK HERE FOR THE CHART

Dabur India Ltd (DABUR):  The "Ascending triangle" breakout around Rs 526 indicates a rally towards Rs 600 levels from a long-term view. This rally has a support at Rs 520 levels. The immediate trend support comes at Rs 528 levels. Significant indicators, RSI and MACD, have made a positive crossover signalling upward direction with momentum likely to stay strong in the coming sessions. CLICK HERE FOR THE CHART

Tata Consumer Products Ltd (TATACONSUM): The "Rising channel" pattern is still intact in the stock with the upward trend showing a rally towards Rs 640 and Rs 680 levels. This move has a support placed at Rs 600 which, if defended aggressively, may see the stock crossing Rs 700-mark. Sustainability above Rs 610 levels may also witness follow-up buying among market participants. CLICK HERE FOR THE CHART

Colgate Palmolive (India) Limited (COLPAL): This stock has managed to absorb the selling pressure around Rs 1,600 levels, which it has been witnessing from December 2019. This resistance breakout opens door for Rs 1,730 to Rs 1,750 levels in terms of an immediate trend. The support comes at Rs 1,600 levels. The MACD has made a positive crossover exhibiting that the trend could remain positive. CLICK HERE FOR THE CHART