P&G Hygiene and Health Care poised for a breakout as Nifty witnesses selling pressure

On the last trading session of the week, the Nifty witnessed follow-up selling pressure, dropping nearly 130 points in its initial hours and breaking the upward-sloping channel in a downward direction. However, it managed to recover around 60 points from the day’s low, but it lost all those recovery gains in the afternoon session and closed near the day’s low. In this sell-off, Nifty FMCG also dropped by around 0.52%, but one stock from the same sector surged around 3% with strong volumes and is now ready to break out from a continuation pattern that has been forming for over 70 weeks.

The stock in discussion is Procter & Gamble Hygiene and Health Care Ltd, which is engaged in the manufacture and sale of consumer goods in the feminine care and healthcare businesses. It operates through the following segments: Health Care Products and Hygiene Products. The Health Care Products segment comprises ointments, creams, cough drops, and tablets, while the Hygiene Products segment offers feminine hygiene products and other skin care hygiene products. The company was founded on July 20, 1964, and is headquartered in Mumbai, India.

Since the lows of March 2020, the stock has almost doubled investors’ money. Currently, it is consolidating in a broad range of Rs 16,448.70 on the higher side and Rs 12,801 on the lower side since the mid-week of January 2022. Interestingly, the lower side of the consolidation range coincides with the retracement support level of almost 50% of the last multibagger rally on the weekly chart. In the current week, the stock has witnessed strong buying interest with volatility in both directions.

By drawing a trendline from the high of the mid-week of January 2022 (Rs 16,448.70) to the first week of August 2022 (Rs 15,500), we can identify a breakout trendline of the continuation pattern named the Triangular Flat Pattern. Interestingly, the stock breached this trendline and closed above it. This trading action indicates a breakout of the mentioned pattern, which could lift the stock to Rs 16,330, representing a gain of more than 15% from the closing level of the current week. 

Swing traders and short-term investors can add this stock to their watchlist.