Breakout stocks: Dabur, ITC top FMCG picks; can gain up to 13%, charts show

Technical outlook on FMCG stocks: Dabur and ITC look stronger on charts compared to its peers HUL, Marico and Godrej Consumer Products.

FMCG stocks were the star performers in an otherwise slippery market on Tuesday with the NSE Nifty FMCG index surging 2 per cent to 55,766, closing at its highest level since January 19, 2024. On Wednesday, the FMCG index extended gain and was up 0.2 per cent.
 

Among individual stocks, Marico zoomed nearly 10 per cent on future growth optimism. Godrej Consumer, Dabur and Hindustan Unilever also rallied over 5 per cent each yesterday. READ MORE

The buying at these counters was attributed to higher volume growth and prospects of a good monsoon.

According to the NielsenIQ January-March data, volume growth seems to be the latest mantra in the fast-moving consumer goods (FMCG) sector. This coincides with rural outpacing urban consumption in volume terms for the first time in five quarters. READ MORE

Meanwhile, here's a technical check on the FMCG index and its key constituents on the likely road ahead.

Nifty FMCG Index

Current Level: 55,831

Upside Potential: 5.3%

Support: 55,530

Resistance: 56,560

The Nifty FMCG Index has given a breakout on the daily scale, as the index quoted above the higher-end of the Bollinger Bands, which stand at 55,530. The short-term bias for the FMCG index is expected to remain positive as long as the index sustains above 55,530.

The overall trend shall remain positive as long as the FMCG index maintains above the 100-DMA (Daily Moving Average), which stands at 54,635. However, since the long-term moving average is above the shorter-term moving averages, namely 20- and 50-DMAs, the index may witnessed tepid gains going ahead. CLICK HERE FOR THE CHART

On it sway up, the FMCG index needs to cross the key hurdle at 56,560 levels on the weekly chart in order to gain upside momentum. Following which, the index can potentially rally to 58,800 levels.

On the flip side, failure to sustain above the 55,250 levels, can lead to a sideways trading phase, wherein the index may re-test the 100-DMA.

Hindustan Unilever

Current Price: Rs 2,351

Bias: Consolidation likely

Support: Rs 2,300

Resistance: Rs 2,406; Rs 2,460

With a sharp 5 per cent rally, Hindustan Unilever (HUL) stock has managed to conquer the 50-DMA hurdle for the first time since falling below on January 20, 2024. The stock is now also trading above the higher-end of the Bollinger Bands, which indicates support at Rs 2,340. CLICK HERE FOR THE CHART

Even as the bias seems positive, the stock has multiple hurdles on the upside, in the form of 100-DMA at Rs 2,406 and the 200-DMA at Rs 2,461. The broader trend may remain tepid as long as the stock trades below these resistances. In the near-term the stock may attempt to consolidate in the Rs 2,300 - Rs 2,460 range.

ITC

Current Price: Rs 440

Upside Potential: 13.6%

Support: Rs 430; Rs 420

Resistance: Rs 463

ITC stock had been struggling around its 200-DMA for the last two-weeks, which stands at Rs 437. On Tuesday, for the third time in six trading sessions, ITC ended above its key long-term moving average and is seen holding above the same in early deals on Wednesday. CLICK HERE FOR THE CHART

The 20-DMA is now on the verge of crossing the 100-DMA, which stands at Rs 433. The stock seems to be in a buy on dip mode, with considerabl support seen in the range of Rs 420 - Rs 430. On the upside, sustained trade above the 200-DMA, can trigger an up move towards Rs 463 levels. Break of the same, can lead to a spurt towards Rs 500-mark.

Marico

Current Price: Rs 588

Upside Potential: 4.6%

Support: Rs 571, Rs 565, Rs 555

Resistance: Rs 598

Marico stock has given a breakout on multiple time-frames. As per the monthly chart, the bias is likely to remain positive as long as the stock trades above Rs 571, followed by support on the weekly scale at Rs 555 and Rs 565 on the daily scale. 

The short-term bias too has turned favourable for the stock, with the 20-DMA crossing the 50-DMA. Hence, the stock is likely to find good support in case of dips going ahead. The overall bias is likely to remain positive as long as the stock trades above Rs 540 levels. CLICK HERE FOR THE CHART

On the upside, Marico stock is expected to test Rs 615 levels, with some resistance seen at Rs 598.

Dabur

Current Price: Rs 560

Upside Potential: 13.2%

Support: Rs 549, Rs 542, Rs 532

Resistance: 576

Dabur stock is currently trading above its higher-end of the Bollinger Bands and the 200-DMA, which stands at Rs 549 and Rs 542, respectively, for the second straight trading session. Key momentum oscillaotors have reached overbought zone, but still indicate a positive bias.

The overall trend is likely to remain positive as long as Dabur stock trades above Rs 532 levels. On the upside, Dabur stock can rally to Rs 634, with interim resistance seen at Rs 576. CLICK HERE FOR THE CHART

Godrej Consumer Products

Current Price: Rs 1,336

Upside Potential: 4.8%

Support: Rs 1,323, Rs 1,313, Rs 1,310

Godrej Consumer Products stock has also given a breakout on multiple time-frames, with support seen at Rs 1,310, Rs 1,313 and Rs 1,323 on the daily, weekly and monthly scales. The overall bias is likely to remain positive as long as the stock sustains above its 20-WMA, which stands at Rs 1,230 levels. On the upside, the stock can rally towards Rs 1,400. CLICK HERE FOR THE CHART