Chart Check: After 10% return in a week, is it time to buy the dip or book profit in REC?

REC stock price rose more than 10% in a week pushing the financial services stock to a fresh 52-week high and the rally may not be over yet, suggest experts.

The stock rose from Rs 125 on April 27th 2023 to a fresh 52-week high of Rs 140.80 on 4 May 2023 translates into a rise of about 10% in a week. The momentum pushed the stock by over 17% in a month.

REC (formerly Rural Electrification Corporation Limited) is a Navratna company under the administrative control of the Ministry of Power, the company website said.


The stock recorded a strong bounce back after consolidating above Rs 110 levels in February 2023. It witnessed a breakout from the earlier swing high of Rs 125-128 seen in January 2023 and September as well as October 2021 on the weekly charts.

A breakout from the crucial multi-year resistance levels of Rs 125-128 has opened room for the stock to head towards Rs 150 in the next 3-4 weeks, suggest experts.

Short-term traders can look to buy the stock now or on dips towards Rs 134-128, they say.

In terms of price action, the stock is trading well above most of the crucial short and long-term moving averages of 5,10,30,50,100, and 200-DMA on the daily charts.

The stock is trading near overbought levels; hence, some pullback could be on the cards. The Relative Strength Index (RSI) is at 78.2. RSI above 70 is considered overbought. This implies that the stock may show a pullback.

MACD is above its center and signal Line, this is a bullish indicator, Trendlyne data showed.

“The pattern analysis on the weekly chart of REC shows that the price action has at length managed to break out from the elongated multi-year lateral trading range,” Rohan Shah, Head of technical Stoxbox, said.

“Amidst the consolidation phase, it saw the formation of contractions on shrinking time and depth. This suggests modest accumulation in and absorption of available supply at elevated levels by smart hands,” he said.

“The price action managed to pierce above the range on tepid volumes and thus we believe any dips towards Rs 134 -128, shall be utilise as buying opportunity with an upside target of Rs 150 with a stop below Rs 125,” recommends Shah.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)