Britannia, ITC, Radico: These FMCG stocks may act as hedge in current fall

Selective FMCG stocks may rise up to 11 per cent, even if broader market loses more ground

FMCG stocks are regarded as safe havens in turbulent times and recognized as a hedge against the falling investment. However, in order to find the right stock, one needs to be selective even in defensive sector. Since mid-February of this year, domestic markets have been on a roller coaster, with uncertainty making investors more anxious. 

While shares of Tata Consumer Products and Hindustan Unilever massively disappointed the street, Varun Beverages, ITC, Radico Khaitan and Britannia Industries have held their bull run intact. 

Barring one-third stocks of Nifty FMCG index, all others have slipped under the 200-day moving average (DMA). Selective stocks have kept the momentum resilient and continue to bolster the overall performance of the index.

On Thursday, Shares of Dabur India and Nestle India soared close to a 2 per cent, while Hindustan Unilever gained 1.50 per cent in a session where benchmark indices slipped 0.65 per cent. 

Here’s the technical outlook on FMCG stocks, which might assist in hedging positions:-

NIFTY FMCG

Outlook: 43,500 hold the key support

Until the support of 43,500 levels is shielded, the index seeks to continue its bullish momentum.  While the immediate mark of 45,750 has become a barrier, the index price action denotes accumulation over the key support. 

Stability over 45,750 shall trigger a fresh upside, leading a new all-time high. The index then can easily reach 47,000 mark, as per the daily chart. CLICK HERE FOR THE CHART

Radico Khaitan Limited (RADICO)

Likely target: Rs 1,300

Upside potential: 11%

The “Higher High, Higher Low” formation is indicating a gradual upside in the shares of Radico Khaitan. The bullish pattern has a dip support of Rs 1,017-mark, its 200-day moving average (DMA). The trend is headed towards reaching a new historic peak, holding the immediate support of Rs 1,075 level. 

The current formation reflects a rally towards Rs 1,300 level. The stock price is sailing upward, despite having low volumes. This reveals the inherent strength of the counter. CLICK HERE FOR THE CHART

Britannia Industries Limited (BRITANNIA)

Likely target: Rs 4,700

Upside potential: 7%

While shares of Britannia Industries have seen a decline in the recent sessions, subsequent support levels could hold the current weakness and the counter may see a robust rebound. The supports are placed at Rs 4,200 and Rs 4,050 levels. The immediate hurdle for the stock is at Rs 4,000-mark, its 100-DMA.  Once this hurdle is taken out, the stock may reach a new all-time high of Rs 4,700. CLICK HERE FOR THE CHART

Varun Beverages Ltd (VBL)

Likely target: Rs 1,500

Upside potential: 11%

Shares of Varun Beverages have recently broken out of the “Double Bottom” formation, indicating a bullish bias. The counter has a support range of Rs 1,100 to Rs 1,050 level.  A decisive close above the minor obstacle of Rs 1,380-mark may prompt a new trend towards Rs 1,500 levels. The immediate support falls at Rs 1,200 level. The broader trend has been witnessing accumulation on healthy corrective dips, which may continue until “Double Bottom” support is protected.  CLICK HERE FOR THE CHART

ITC Ltd (ITC)

Likely target: Rs 4,25

Upside potential: 11%

There is a price divergence on the Relative Strength Index (RSI), reflecting bullish strength in the stock price. This may see some weakness as the indicator shows a downward trend, however the ability hold the upward momentum when the indicator shows weakness, reveals stock is gearing up for a resilient up move. The immediate support is set at Rs 370 level, which needs to be considered on the closing basis. 

The medium-term bullish trend highlights a rally towards Rs 425, as per the daily chart. CLICK HERE FOR THE CHART