The stock closed in red, down by 4.29%, on 17th December 2021 at Rs. 84.85.
On a daily chart, it is clearly seen that the stock had a strong resistance at Rs. 85.45 for over the months of April 2021 to October 2021. After breaching those levels, it went to make a high of Rs. 108.05, which was also the 52 weeks high at that point of time. Therein, the stock took a resistance again at that level and started its downward journey up to the levels of Rs.85.45, which acted as resistance earlier.
We can observe that the stock has taken support multiple times over the period of two year (Support zones are seen in the months of Oct’19, Feb’20, and Nov’21).
The 50-EMA line has been moving above the 200-EMA line since the start of the year 2021. And also, the stock has taken support twice on the 200-EMA line. It is a positive indicator and as well the view is still bullish on the stock. RSI as on 17/12/2021 stood at 36.25. The stock is neither in an oversold or overbought position, which is also an positive indicator for a midterm perspective.
It is evident from the chart that the stock is making higher highs and higher lows in a large time frame (i.e over 20-25 days) and also it is moving in an increasing trend, taking support on the trendline twice.
The fact is also confirmed by the spike in the volume levels the stock is traded with over the past few months. Bulk buying and selling have been observed which means that post-merger, the stock has come into the limelights.
What can be expected??
The stock has already formed a rounding bottom pattern over a long time frame, which is usually an indicator of a bullish trend but however, the stock didn’t sustain and moved downwards in the months of Feb’21-March’21. And now after considering the above two daily frame charts, we can say that if the stock breaches the levels of Rs 108-108.10 and sustains above those levels for a day or two, new levels can be seen. The next immediate targets can be Rs.128-132-144, which are also the earlier resistance zones. If the stock breaches the trendline and breaks the support line placed at 85.45, more downfall can be seen. Long term investors can keep the price levels of Rs.72 and Rs.61 as the key levels.
Disclaimer : This is solely for educational purposes and not a trading recommendation.