This stock has seen 2 months of sideways moves and, during this time of consolidation, the RS line, which compares the stock against the broader NIFTY 500 Index, is strongly moving higher.
The Bollinger Bands have grown over 60% narrower than usual, which reflects a period of low volatility in the stock. Periods of low volatility are often followed by periods of high volatility, which stays higher than normal in quantum. This increases the possibility of a breakout in the stock. A sharp move on either side, more likely to the upside, is probable over the coming days. The MACD has turned bullish and the PPO has turned positive. The RSI has marked a fresh 14-period high.
If the present pattern is resolved on the expected lines, the chances of the price testing the 1700-1720 levels cannot be ruled out. This setup will remain in force until the stock keeps its head above 1610.
About the author:Milan Vaishnav, CMT, MSTA is a qualified Independent Technical Research Analyst at his Research Firm, Gemstone Equity Research & Advisory Services in Vadodara, India. As a Consulting Technical Research Analyst and with his experience in the Indian Capital Markets of over 15 years, he has been delivering premium India-focused Independent Technical Research to the Clients. He presently contributes on a daily basis to ET Markets and The Economic Times of India. He also authors one of the India's most accurate "Daily / Weekly Market Outlook" -- A Daily / Weekly Newsletter, currently in its 15th year of publication.
Milan's primary responsibilities include consulting in Portfolio/Funds Management and Advisory Services. His work also involves advising these Clients with dynamic Investment and Trading Strategies across multiple asset-classes while keeping their activities aligned with the given mandate.