Two giants lead breakout in Nifty FMCG index

Finally, the Nifty FMCG index broke out of its consolidation phase on Friday, December 8. The consolidation had kicked-off on July 27, 2017. The index also gave a kind of inverse head and shoulder pattern breakout at 26,130, majorly driven by ITC and Hindustan Unilever (HUL). ITC and HUL, the Nifty 50 stocks that hold nearly 45 and 19 per cent weightage in Nifty FMCG index were trading up by more than 3 per cent each. The index holds potential of some more upside of nearly 1,000-1,500 points, of course, driven by these two giants.

After a gap-up down opening on July 18, 2017, the stock of ITC has been trading with gradual lower tops and lower bottoms. After almost hitting a double bottom near to 250 levels, the stock moved straight up in Friday’s session breaching its previous major resistance of 261.45 on NSE. The move is supported duly by rising volumes and 14-period RSI positive crossover. We can expect some more upside going forward.

Another giant, HUL has reached new highs today after breaching its ascending triangle pattern breakout at 1,290 level with reasonable volumes and 14-period RSI quoting at 67 levels depicting momentum. The stock is trading at all-time high levels with no signs of profit booking at least for now.