Tech View: How to trade paint stocks amid drop in crude oil prices?

Share of Asian Paints and Berger Paints recorded new all-time highs in trade on Thursday

Off late, Brent Crude prices are on a downhill. They have crashed 15 per cent from the peak of $77.80 a barrel level and are currently trading around $72 a barrel after recovering from the low of $67.42 hit earlier in the week. This drop in crude prices has a positive impact on paint stocks.

No wonder, the stocks of Asian Paints, Berger Paints and Pidilite Industries have scaled news highs in trade today. Even on a year-to-date (YTD) basis, their performance has been noteworthy with Pidilite Industries rallying 32 per cent and Asian and Berger Paints up 15 per cent each, data available with ACE Equity shows.

Here's a look at what tech charts are signalling for some of these names:

ASIAN PAINTS LTD (ASIANPAINT)

Likely target: Rs 3,500

Upside potential: 11%

The stock scaled a new all-time high in intra-day trade on July 22 and continues to trade with a firm upward bias. Current momentum indicates a possible rally towards Rs 3,500 levels. As long as the support of 50-days moving average (DMA) is held firmly, placed at Rs 2,958-mark, the upside sentiment is expected to surge. CLICK HERE FOR THE CHART

PIDILITE INDUSTRIES LTD (PIDILITIND)

Likely target: Rs 2,600

Upside potential: 11%

Although the stock managed to cross its resistance at Rs 2,340 levels, follow-up momentum has not been very active. Besides, the price action has not been able to carry the upward momentum. That said, if the support of 50-DMA at Rs 2,231 is held firmly, the reversal may regain momentum and the stock can head towards Rs 2,600 levels. Currently, it is witnessing buying momentum in the overbought category of the Relative Strength Index (RSI), signalling bullishness. CLICK HERE FOR THE CHART

BERGER PAINTS INDIA (BERGEPAINT)

Likely target: Rs 900 to Rs 930

Upside potential: 5% to 8%

After conquering the major resistance of Rs 830-mark, the stock is indicating an upward breakout rally towards Rs 900 and Rs 930 levels. The immediate closing basis support comes at Rs 850 levels, followed by Rs 825. The overall trend is bullish with price action showing a stable upside. CLICK HERE FOR THE CHART

Indigo Paints Ltd (INDIGOPNTS)

Likely target: Rs 2,750 to 2,800

Upside potential: 5% to 7%  

  

The stock is decisively holding the support of 50-DMA, currently placed at Rs 2,544 levels. The RSI has crossed the resistance value of 53 and is climbing higher with positive strength. The Moving Average Convergence Divergence (MACD), too, is managing an upward direction by staying above the zero line. The overall trend suggests a move towards Rs 2,750 and 2,800 levels. CLICK HERE FOR THE CHART

Akzo Nobel India Ltd

Likely target: Rs 2,500

Upside potential: 5%

As long as the stock stays above its 200-DMA, placed at Rs 2,222 levels, the upside bias could breakout above the resistance at Rs 2,390 levels. When that happens, a rally towards Rs 2,500 level can't be ruled out. The current momentum shows a sideways move with the downside capped at 200-DMA. CLICK HERE FOR THE CHART