This Blue-chip stock is trading near all time high and also closed above its 52 week high. What should investors do?

Last updated on February 3rd, 2024 at 03:43 pm

bajaj auto

The blue-chip stock which is trading near its all time high is none other than Bajaj Auto Ltd.

From a low of 1788 level in 2020 market crash, Bajaj-Auto made a high of 4361 in Feb, 2021. And after getting rejected at that high level it fell to 3447. It tried to bounce back to that level of 4360 but unfortunately got rejected at that level of 4361 again.

Then, it made a low at 3047 level in Dec, 2021. After that it just traded in a range of that level and made a bottom of somewhere around 3249 odd levels. And since then it was just consolidating but never came near it’s bottom level of 3249. That’s why, 3249 is a very strong support level for Bajaj Auto.

Last year in Aug, it made a high at around 4128 levels and got profit booking from that level too. Then, it made a bottom at around 3527 level and since then it just consolidating between a range of 3600 to 3990 levels respectively.

But this month in April, Bajaj-Auto just made a high of 4307 after rallying 12% in last 8 trading days. So, at this current juncture investors and traders are little confused about what should they do?

The answer of this question would be “Patience” as the Bajaj-Auto stock is currently trading at 4288 and the all time high of this stock is 4361. And, it also got rejected (i.e., strong resistance) around this all time high level of 4361 for nearly 2 times and one time it just got rejected from a high of 4128 only. It is the 4th time that Bajaj-Auto is trading near that level. So, there are really very high chances of getting rejected from that level of 4361 again. As you can see in the monthly chart of Bajaj-Auto given below.

bajaj auto monthly chart

So, the traders and investors should wait for Bajaj-Auto to give a clear breakout and close above the strong resistance level of 4361 as shown in the monthly chart above. And if Bajaj-Auto breaks that 4361 resistance level and close above it in the coming days then, it would be the best time for investors for a fresh entry and traders can also make use of that opportunity to make some money in short term. The RSI of Bajaj Auto stock is also not overbought right now so, it would also support further bullishness in Bajaj Auto.

Conclusion

Investors and Traders should wait for Bajaj Auto stock to close above 4361 levels strongly. Then, new investors can enter fresh in Bajaj Auto stock with a stoploss of 4361 level only because once it strongly break and close above that level of 4361. Then, that level will act as a really strong support.

Traders should also wait for the same and once Bajaj Auto stock strongly closes above 4361 level, Then, they can also take a bullish trade by buying call options or selling put options with the same stoploss of 4361 level.

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