Bullish Trend: Technical Breakout Stocks: How to trade RIL, M&M and ICICI Bank on Monday?
By sector, buying occurred in telecommunications, capital goods, real estate, consumer durables, and industrial goods, while some selling occurred in oil and gas, public sector, and energy stocks.
Stocks in focus included Reliance Industries, up nearly 1%, ICICI Bank, which trimmed gains after hitting an all-time high, and M&M’s, which closed with gains of nearly 1% on Friday to hit a new record.
We’ve compiled a list of three stocks that recorded 52-week highs, all-time highs, volume or price breakouts.
We spoke with analysts about how we should view these stocks in the coming trading days, purely from an educational standpoint.
Analyst: Virat Jagad, Technical Analyst at Bonanza Portfolio LtdICICI Bank Ltd.
A bullish trend is evident in ICICI Bank as it experiences a breakout from the ascending triangle pattern on the daily time frame. The price is currently at a high and is forming a low wick candle indicating buying interest in the lower range.
The stock found support above the 21-day EMA and the price was consistently trading above the 21-day (fast moving average) and 50-day EMA (slow moving average), indicating a positive trend. The surge in trading volume on the breakout day is suggestive. Active participation of buyers. In terms of momentum, RSI is heading north, indicating a bullish sentiment.
On the directional front, DI+ is above DI-, indicating a positive trend, and ADX is trading above the 20 line, indicating solid movement strength.
For a potential trading strategy, you could consider the daily closing support level of 1030, with a further resistance target of 1150.
Reliance Industries:
Reliance Industries Ltd has experienced a breakout in the ascending channel on a weekly basis and it is noteworthy that the stock is maintaining its position above the hurdle, which indicates strong bullish momentum.
This formation shows bullish price action, implying high interest from buyers and indicating expectations of further buying activity in the future.
In terms of exponential moving average (EMA), the stock is trading above the important EMA, indicating a positive trend. Fast EMA (21) acts as a support level for the script in line with the uptrend.
Momentum analysis shows that the Relative Strength Index (RSI) is in overbought territory, confirming that bullish control is dominant.
On the directional front, DI+ is above DI-, indicating a positive trend, while ADX above the 20 line indicates the strength of the ongoing movement.
So, rough technical indicators suggest that there is a possibility of an increase towards 3100 with support levels around 2900 in the coming period.
Mahindra & Mahindra Ltd:
In Mahindra & Mahindra Ltd, a Rising Wedge pattern formed with strong support at the lower rising trend line, indicating notable interest from buyers due to significant buying pressure and increased volume.
Recently, there has been a departure from this pattern, giving rise to an optimistic outlook for security.
Moreover, the price is currently trading above the major exponential moving average (EMA), reinforcing the bullish sentiment for the security.
The MACD line, a momentum indicator, has crossed above the signal line, indicating that bullish momentum is in charge of the script.
In terms of direction, DI+ is positioned above DI-, confirming a positive trend, while ADX trading above the 25 line highlights the strength of the move, solidifying the positive outlook for Mahindra & Mahindra Ltd.
To maintain and strengthen buying interest, stock prices must remain above 1840 levels. In this scenario, the next support level is expected to be 1700, with 2300 acting as resistance for the stock.
(Disclaimer: Expert recommendations, suggestions, views and opinions are their own and do not represent the views of The Economic Times.)
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