ITC: Multi-Month Breakout Ahead of the Budget

On Friday, Indian markets experienced a notable decline as the Nifty and Sensex fell by 0.61% and 0.44%, respectively. This downturn was primarily driven by a sell-off in the US market. However, certain stocks managed to outperform the broader indices, providing some support and helping to limit the overall decline.

Infosys and ITC Standout Performer

Infosys emerged as a standout performer, with its stock rising nearly 3%. The company’s quarterly numbers exceeded market expectations, which buoyed investor sentiment and helped counterbalance some of the market’s losses. ITC has also gained 1.65%. 

Company Overview- ITC

ITC Limited, formerly known as Imperial Tobacco Company of India Limited, is a diversified conglomerate with interests spanning FMCG, Hotels, Packaging, and Agri-Business. ITC is renowned for its sustainability practices, being carbon, water, and solid waste recycling positive. Furthermore, the company’s operations significantly contribute to creating sustainable livelihoods in rural India.

ITC on Verge of Multi-Month Breakout 

Typically, ITC garners attention around budget time due to speculation about the imposition of a sin tax. This time, however, the focus is on the stock’s technical performance. ITC is approaching a multi-month breakout level, showing resilience even as the broader market declines.

On Friday, ITC’s shares rose by 1.65%, nearing a seven-month breakout. The stock had previously hit a high of Rs 481.45 in January before undergoing a correction. It formed a strong base and began rallying in late June, positioning itself on the verge of a significant breakout. A move above the level of Rs 481-482, would result in a breakout. The daily MACD indicator is pointing northward and remains above its nine-period average, indicating a positive bias.

ITC’s Recent Performance

In July alone, ITC’s shares gained 12.65%. However, for the year 2024, the stock has posted modest gains of 3.35%. Despite the broader market’s challenges, ITC’s robust performance and technical setup suggest it could continue to outperform in the near term.

 Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.