Jubilant Industries : Showcasing robust chart setup !!

 

Jubilant Industries: At strong support zone !!!    

This stock had earlier witnessed a powerful bull run which continued for around 4 years from August 2013 - January 2017, in that period the stock rallied from 25 to 450 level which is an outstanding run and blissful returns for the shareholders.

Post printing a high near 420 in January 2017, the bull cycle changed dramatically, and thereon bears have taken the lead. The stock price tumbled from 420 to 76 levels in less than two and a half years. Post that the stock has been trading in a sideways range from 75 to 150 levels. 

This stock caught an eye when a few weeks back, the stock price witnessed a strong breakout from the consolidation phase with sharp surge in volumes and formation of back to back two wide bullish candles. 

The consolidation phase took a shape of a bullish reversal Double bottom price pattern which gives a clue of a probable change in trend from bearish to bullish. In early August 2020 stock registered breakout from the same and post that stock has witnessed profit booking and has been declining thereon. 

The decline post the breakout looks more like a profit-booking because of the behavior of the volumes. With the decline in price with wide red candles, the volumes have been (below average) consistently declining which signals profit booking or an exit by small players. If the decline was genuine then i believe with wide red candles, volumes bars should also be large or above average.

Post steady decline, this week price witnessed some bounce back and formed a green candle. The positive point to notice here is the size of the volume bar. The volume is greater than from the last 5-6 weeks volumes and has been above the average.

I have noticed that if the price has to continue its upward journey price generally retracted back towards 20 Moving average and then resume its prior trend. In this case, also the decline in price has arrested near 20 EMA and this week price bounced back hitting the average line, I believe if the price holds above the 20 EMA (which is expected to happen) the stock price likely to resume its prior trend and quickly surpasses its previous swing high in the short run.

Following price patterns, volumes, and other technical tools price has the potential to scale higher towards 170-188-220 in short to medium-term.

The above view holds true until the price does not close below 115 levels. The strong support is visible around 130-123 levels.

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Disc. The above-shared analysis is solely my view as per my understanding and knowledge and for educational purposes. I will not be responsible for any loss or gain incurred.