Stock Name: Godrej Consumers CMP: 1259
Target: 1400 Stoploss: 1090 Duration: 2-3 Months

Godrej Consumer Products is a fast moving consumer goods Company, manufacturing and marketing Household and Personal Care products. The stock had gained approximately 29% from its 52 week low. Company has strong financials with debt to equity ratio of 0.25. The stock is going through bullish reversal pattern where we have seen the stock taking double bottom support as well as completion of rounding top pattern. We can see major change in trend and a momentum reversal from a prior down move in market trading. The prior down move has been completed and we can attribute fresh bullish trend as the stock has closed and sustained above its lower top and lower bottom formation on weekly scale. Not only has the stock closed above its prior swing high but also is trading above its 50% retracement taken from its high of 1545 and recent swing low of 953.

This gives validity of exhaustion of rounding top pattern and implication of fresh impulse bullish trend. Another indicator which is also pointing towards the sign of upmove is the crossover of 14 and 21 WEMA (Weekly Exponential Moving Average). Historically when ever the crossover of 14 and 21 WEMA has occurred in the stock, it has given an average return of 25% and this stock is on the cusp of crossover which is again a bullish signal.

We recommend taking long positions with expected target of 1400 and stoploss of 1090 which is 23.6% retracement.

Godrej Consumer Products rallies nearly 30% from March lows; what should investors do?