Relaxo Footwear Ltd saw its share price rise sharply by nearly 9% in a single day, driven by improved sentiment in consumer-oriented stocks. This rally occurred in a largely flat broader market, indicating sector-specific buying interest. According to analysts, the move is likely supported by expectations of recovery in rural demand, technical bounce from accumulation zones, and rotation into defensives amid midcap volatility.
What’s Driving the Rally?
- Sector Rotation: Investors are shifting into consumer names like Relaxo, Dabur, and PC Jeweller as part of a safety trade.
- Technical Accumulation: The stock had formed a base near ₹405.85, where accumulation by institutions and traders was visible.
- Valuation Catch-Up: After a ~40% correction over the past year, the stock is now seen as oversold, triggering bargain buying.
Technical & Momentum Setup
- Current Price: ₹506.40
- Support Zone: ₹405.85 (accumulation level)
- Relative Strength (RS): Still underperforming Nifty 50, RS remains negative
- Momentum Score (StockEdge):
- 1 Month: 63/100 – Bullish
- 3 Months: 65/100 – Bullish
- 6 Months: 28/100 – Bearish
Short-term momentum is turning positive, but long-term structure remains weak.
Also Read: Coforge Ltd Recovers 47% from Bottom, Eyes Breakout Above All-Time High ₹2005.40
Entry Strategy – Caution Advised
- Aggressive Entry: Possible with strict stop loss at ₹405.85, especially for swing traders.
- Safer Entry: Wait for the RS Indicator to move above 0, confirming trend reversal and relative strength.
- Avoid Chasing: Today’s rally may not sustain without broader confirmation. Investors should avoid entering at peak without a defined exit strategy.
Exit Plan
- Use swing lows as trailing stop-losses.
- Do not wait for static target prices; in strong uptrends, prices often exceed predictions—but reversals can be equally sharp.
Relaxo Footwear’s 9% rally signals short-term enthusiasm, driven by sector rotation and oversold conditions. However, long-term investors should be cautious. The stock is still in a bearish zone, and confirmation of sustained momentum is crucial. Enter with tight stop-losses or wait for RS improvement to ensure you’re not buying into a temporary bounce.
Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Please consult a financial advisor before making investment decisions.
Viraj Jain is an active stock market trader and technical analyst with a sharp eye for identifying trend-driven opportunities. Passionate about market movements and price behavior, he specializes in analyzing crucial support and resistance levels in high-momentum stocks. Viraj is dedicated to keeping fellow investors informed with timely stock updates, chart-based insights, and actionable technical analysis that bridges the gap between market noise and informed trading decisions.