While the broader market remained flat for the day, the share price of Colgate-Palmolive (NYSE:CL) (India) Limited was on a roll. The company is a market leader in the toothpaste space in India, having a market capitalization of INR 54,461 crore. The stock has been a consistent long-term wealth compounder for investors with a 5-year CAGR of 13.5%.
The stock had been moving sideways for some time and had formed a rounded bottom-like formation on the daily chart. Although, this is not an actual rounding bottom pattern as it forms at the bottom, the implications amid a strong breakout from the resistance of INR 2,050 in today’s session is projecting a good upside potential.
Image Description: Daily chart of Colgate-Palmolive (India) with volume bars at the bottom
Image Source: Investing.com
Any stock trading at an all-time high should not be deemed as a weak counter (unless some
very strong bearish signals emerge). This stock’s bullish picture further got strengthened with today’s breakout as it jumped 3.27% to INR 2,067.9, closing near the high of the day.
This is a slow-moving counter and roughly 1.77x more volatile than Nifty 50, therefore, a very rapid price surge should not be expected. This stock is more suited for traders who like to buy and wait for some time, rather than going in and out on every few points move.
As per the chart pattern, the stock seems geared up to further stretch the rally till INR 2,190. To place a stop loss, the bottom end of the base, i.e. INR 1,910 in this case can be a good reference point.
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