Trendline Breakout, Bullish EMA Crossover and Improving Momentum Indicators Prompt Brokerage's Positive View
Eternal Ltd. has emerged as one of Bajaj Broking's preferred technical picks, with the brokerage expecting the stock to climb to ₹290 over the next six months. Analysts believe the stock has completed a significant technical turnaround after breaking above key resistance levels, supported by improving momentum indicators and sustained buying interest.
Currently trading around ₹259, Eternal has displayed resilience despite recent market volatility and has outperformed the benchmark indices over the past few months. According to Bajaj Broking, the stock offers an attractive risk-reward opportunity for medium-term investors.
Stock Outperforms Benchmark Indices
Eternal has delivered stronger returns than the broader market, recovering sharply from its March lows. While the Nifty 50 has posted modest gains during the period, Eternal has witnessed a much stronger rebound, reflecting increasing investor confidence.
The stock recently traded in the ₹257–₹261 range during Monday's session, comfortably holding above several important technical support levels. Its ability to outperform the benchmark even during periods of market uncertainty has strengthened the bullish outlook among technical analysts.
Major Trendline Breakout Signals Reversal
The cornerstone of Bajaj Broking's positive view is the stock's breakout above a long-term falling trendline that had capped gains for several months.
This resistance line connected the major peaks recorded in October 2025 (₹368) and February 2026 (₹308). Eternal has now decisively moved above this trendline and continues to sustain above the breakout zone.
In technical analysis, such a breakout is often interpreted as the end of a corrective phase and the beginning of a fresh upward trend. Sustaining above this level increases the probability of continued buying momentum.
Bullish EMA Crossover Confirms Strength
Another important technical trigger identified by Bajaj Broking is the bullish crossover between the 20-day Exponential Moving Average (EMA) and the 50-day EMA.
The shorter-term EMA moving above the longer-term EMA indicates that recent price momentum has strengthened considerably. This crossover is widely regarded as a positive technical signal, suggesting that buyers are gaining control of the trend.
In addition, Eternal has consistently traded above its 100-day Moving Average, reinforcing the stock's improving medium-term outlook.
Nine Weeks of Consolidation Build a Strong Base
Rather than witnessing a sharp rise immediately after its recovery, Eternal has spent nearly nine weeks consolidating within a broad range of ₹235 to ₹265.
According to Bajaj Broking, this prolonged consolidation has helped the stock absorb earlier gains while allowing investors to accumulate at higher levels. Such price behaviour often creates a strong foundation for the next phase of an uptrend.
Technical analysts generally consider range-bound consolidation after a recovery as a healthy market structure, particularly when volumes remain stable and momentum indicators continue improving.
MACD Buy Signal Adds Further Confidence
The brokerage has also highlighted the positive reading from the Moving Average Convergence Divergence (MACD) indicator.
The MACD has generated a fresh buy signal after crossing above its nine-period signal line and continues to remain in positive territory. This indicates strengthening bullish momentum and supports the expectation of further price appreciation.
When combined with the trendline breakout and moving average crossover, the MACD signal strengthens the overall technical picture.
Strong Support Levels Reduce Downside Risk
Bajaj Broking believes the immediate support zone for Eternal lies between ₹235 and ₹240.
This support area is significant because it aligns with:
- The stock's recent swing lows.
- An important Fibonacci retracement level.
- Previous buying zones where demand has consistently emerged.
As long as the stock remains above this range, analysts expect the broader bullish trend to remain intact.
Why the Brokerage Sees ₹290 Ahead
The brokerage's target price of ₹290 is based on multiple technical projections rather than a single indicator.
The target represents:
- Approximately 50% retracement of the previous decline from ₹368 to ₹213.
- The projected move derived from the recent consolidation range.
- Continuation of the emerging bullish trend following the breakout.
If buying momentum continues and the stock successfully clears its immediate resistance levels, Bajaj Broking believes the ₹290 target is achievable over the next six months.
Technical Indicators Point Towards Positive Momentum
Several technical indicators currently support the brokerage's bullish stance:
- Breakout above the long-term falling trendline.
- Bullish crossover of the 20-day and 50-day EMAs.
- Sustained trading above the 100-day moving average.
- Positive MACD crossover.
- Strong relative performance compared with the benchmark index.
- Healthy consolidation after a sharp recovery.
The convergence of multiple bullish signals makes the technical setup stronger than one based on a single indicator.
Investment Outlook
Bajaj Broking believes Eternal is entering a favourable phase after completing a prolonged correction and building a solid technical base. The combination of improving momentum, strong chart patterns and supportive moving averages indicates that the stock could witness sustained buying interest over the coming months.
While investors should remain mindful of broader market volatility, the brokerage sees the current price range as an attractive accumulation zone for medium-term investors. Future quarterly earnings, business performance and overall market sentiment will continue to influence the pace of the stock's upward movement, but the technical structure currently remains firmly positive.