Why ₹2,400 is a key level for HUL? An analyst explains

NSE

Shares of Hindustan Unilever Ltd. (HUL) are the top losers on the Nifty 50 index, trading with losses of 2%. The stock has already declined 11% from the recent highs of ₹2,723 which it made on June 5.The surge in HUL between June 3-5 came amidst the outcome of the Lok Sabha elections and the subsequent upgrade by Jefferies to "buy". The brokerage also increased its price target on the stock to ₹2,950 from ₹2,530 earlier. The stock though, over a three-year period, has been flat and an underperformer compared to the benchmark indices.HUL shares also at one point on Friday slipped below their 200-Day Simple Moving Average, a level it had crossed during this three-day surge earlier this month. Jigar Patel of Anand Rathi said that the level of ₹2,400 is the previous breakout range for HUL, which is close to its 200-Day Simple Moving Average. "This convergence creates a critical zone to observe for potential bullish reversals," he said.Patel also added that the 50% retracement level of HUL's earlier rally will also fall around levels of ₹2,400, which further emphasizes the significance of this level."If HUL can sustain above the ₹2,400 zone for a few days, it could indicate a bullish reversal, with the potential to head back up to levels of ₹2,575, which is a resistance level now for the stock, the technical analyst said.Out of the 43 analysts that have coverage on Hindustan Unilever, 25 of them still have a "buy" recommendation on the stock, 12 say "hold", while six of them have a "sell" rating on the stock.The last instance of the stock seeing double digit annual returns on either side was in 2020, when the stock had risen 24.5%. Since then, the stock fell 1.5% in 2021, gained 8.5% and 4% respectively in 2022 and 2023 respectively.Shares of HUL are trading 1.4% lower at ₹2,447. The stock is down 8.1% so far in 2024.