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Jyothy Labs, part of the household products industry, has fallen by about 20% from the highs and has found support above the 200-DMA on the daily charts.The stock is trading above crucial support levels; hence, a technical bounceback could be on the cards. Short-term traders can look to buy the stock now for a target above Rs 500 in the next 2-3 months.The stock hit a record high of Rs 553 on 24th January 2024 but it failed to hold on to the momentum. The stock closed at Rs 439 on 28th March 2024 which translates into a fall of about 20%.The stock witnessed a steady decline from January 2024 highs which took it towards 200-DMA on the daily charts. The stock witnessed a bounce back after testing Rs 380 levels on the daily charts.On the weekly charts, Jyothy Labs seems to be facing some resistance around the 20-week moving average for the past 4 weeks placed at Rs 467. Hence, a close above the same could trigger fresh buying into the stock.In terms of price action, the stock is trading above 5,10,20,30, and 200-DMA but below the 50-DMA on the daily charts.108965303The daily Relative Strength Index (RSI) is placed at 50.1. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed.“After experiencing a significant decline of 20%, the Jyothy Labs stock has reached a crucial support level that may signal a reversal of its downward trend,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.“This support level is significant because it is also the 200-day long-term moving average, which is commonly used by traders and analysts to assess a stock's health,” he said.Despite the previous decline, the stock has formed a solid base at this important support level and has recently broken through a 41-day falling trendline. This is a bullish sign and suggests that the stock may continue its upward trend.“The stock has established harmony across multiple timeframes, including the monthly and weekly charts, indicating that it has a strong foundation. Additionally, a large Tai formation on the monthly chart suggests that there is considerable interest from buyers,” highlighted Shah.Moreover, on the daily chart, the momentum oscillator RSI has formed a positive divergence, which is a bullish signal that indicates that the stock may continue to rise.“Taking into account the above factors, the stock presents an excellent buying opportunity in the range of Rs 448 to Rs 453. It is recommended to set the stop-loss at Rs 425 on a closing basis, while the upside potential can be as high as Rs 520,” recommended Shah.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)