Castrol India shares witnessed a sharp rally today, jumping over 9% to hit its highest level in eight years. The lubricant manufacturer's stock price surged to Rs. 234.50 intraday on the BSE, a level not seen since June 2016.
The steady rise in Castrol India's share price over the past month leaves investors with an important question – whether to book profits by selling the stock or hold on in anticipation of further gains. Let's analyze what technical indicators and market experts have to say:
What are the technical signals suggesting?
On charts, Castrol India's relative strength index (RSI) stands at 72. Technical analysts see this as a sign the stock is currently in the ‘overbought' zone as RSI above 70 indicates overtrading momentum.
However, the rising RSI also reflects strengthening bullish sentiment. The positive divergence between price and RSI reinforces the upside potential. Volume analysis further shows rising trade volumes during the recent rally, validating robust underlying demand.
What do analysts have to say about the outlook?
Gaurav Bissa of Incred Equities notes Castrol India shares have been making higher highs and higher lows since April 2022, signaling a multi-year trend reversal pattern. With volume expansion supporting the upmove, a strong base seems to have been formed for further gains.
Bissa expects the stock's positive momentum to continue in the near future. It could target Rs. 245 if the rally pushes prices above Rs. 230 on any trading day, as per his technical analysis.
Sachchidanand Uttekar of Tradebulls Securities also advises buying on dips rather than chasing momentum. As long as weekly support holds around Rs. 208, upside to Rs. 270-285 is possible, according to Uttekar.
On balance, most signs point to more upside for Castrol India. Long-term investors may hold current positions and look to average on meaningful dips only. For fresh entry, waiting out near-term volatility may be a better strategy.
