ChartTalk: Is There A Potential Breakout In The Offing?

ChartTalk: Is There A Potential Breakout In The Offing?

by | Aug 6, 2022 | ChartTalk

This telecom stock has seen some classical technical patterns playing out very well on the charts. BHARTIARTL marked a classical double top resistance near 780  levels between November 2021 and April 2022 that spanned over five months. The most recent price action shows the price trying to chart a potential breakout with multiple pieces of evidence supporting this attempt.

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After forming a double top resistance near 780, BHARTIARTL slipped under corrective decline; this took the price near 640 over the next couple of weeks. The levels of 635-640 have acted as a strong support area for the stock multiple times as evident from the chart. The price tested this pattern support a couple of times in the recent past only to bounce back from those levels.

The most recent price action on the chart has seen the price in a narrow trading range between 640-695 levels. The price has tried to break above this pattern resistance zone by penetrating the upper trend line. As of today, the stock has closed a notch above its 200-DMA which stands at 703.07.

The RSI is also seen breaking out of a pattern formation much ahead of the price breakout which is bullish. The indicator has also marked a new 14-period high which is bullish; however, it is neutral and does not show any divergence against the price.

Over the last several months while the prices declined, OBV (On-Balance Volume) stayed sideways and did not decline with the price. This means lesser volume participation during the corrective phase of the stock.

Over the past few days, while the stock makes an attempt to stage a breakout, the volumes have remained stable around their 25-day average. The stock remains in the improving quadrant of the RRG.

There are high possibilities of the stock inching higher and confirming a breakout from the trading zone that it has formed. If the prices move on the expected lines, the possibilities of the stock testing 725 and 740 levels cannot be ruled out. Any close below 675 will fail this attempt and the projected move.

Foram Chheda, CMT

ChartTalk: Is This Metal Stock At The Cusp Of Reversal? Let’s Find Out

ChartTalk: Is This Metal Stock At The Cusp Of Reversal? Let’s Find Out

by | Jul 15, 2022 | ChartTalk

Following marking of its most high near 406 levels, VEDL witnessed a sharp secular corrective move. This move on the downside saw the stock paring over 49% of its value from its peak over the past four and half months. This corrective move also saw the stock marking its low point near 206 in the first week of July.

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However, over the past couple of weeks, the stock has made some fierce attempts to mark a bottom for itself. The most recent price action shows that RSI has shown a strong bullish divergence against the price. While the price marked lower bottom, the RSI did not. Occurances of a bullish divergences on the lead indicators like RSI contribute in a very potent manner while the stock attempts to mark a bottom for itself; more so if such bullish divergences emerge after a meaningful decline.

The stock has rolled over the improving quadrant of the RRG when benchmarked against the broader NIFTY500 index; this denotes an end to the period of potential underperformance of the stock.

There is also a formation of a small inverted head and shoulder pattern; this is a kind of a bullish reversal pattern. However, it has developed under less number of days; therefore, it may not be fractal be visible on the highe timeframe charts.

RSI has also marked a fresh 14-period high and this is bullish.

Broadly speaking, any strong move above 236 may lead to a potential reversal of trend in this stock. If this happens on the expected lines, the stock may test 265 – 272 levels over the coming weeks.

Foram Chheda, CMT

ChartTalk: Lead Indicators Suggests A Potential Upside In This Food Service Stock

ChartTalk: Lead Indicators Suggests A Potential Upside In This Food Service Stock

by | Jul 4, 2022 | ChartTalk

After forming its most recent high point in the last quarter of 2021, JUBLFOOD has been under a corrective decline. The stock has shown retracement from its highest price point and has been in a falling channel for the last eight months. Some developments on the technical charts show that the stock may hold some potential of reversal; it may put a base for itself for at least for the short term.

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Let us subject this daily chart to basic pattern analysis and see what this chart has to tell.  From the high point of 916 seen in the last quarter of 2021, the stock stayed under a corrective decline; it tested its most recent low point near 450 during the month of May.

Interesting here to note is the fact that while the stock made a lower low of 450.25 (as compared to the earlier low point of 487), a strong bullish divergence is observed on the RSI as while the price made a lower low, the RSI did not violate its earlier low.

The current moves in the price had led to the formation of a symmetrical triangle pattern; this is usually a neutral pattern and can resolve on either side. However, if this is read with the bullish divergence of the RSI, it shows that there is larger possibility of the price moving higher over the coming days.

The RS line has stopped falling; it has reversed the trend and it moving higher and is above the 50-DMA.

There is a possibility that if the prices move as expected and if the technical evidence plays its role, the stock may test 580 and 700 levels over the coming days. The present form of the symmetrical triangle will break down if the price close below 500.

Foram Chheda, CMT