Stock of the week !

 

ENDURANCE TECH : CONFLUENCE OF SUPPORT !!!

The stock has been in strong momentum this year especially from April 2020, Post forming a low in April 2020, the stock has witnessed a sharp recovery from thereon. In April 2020, stock made a low around 970 and in august stock printed a high of 1180 which is a whopping rally in very little time. 

Analyzing the weekly chart, the stock has been trading in Descending channel from last more than two years. It has been observed, price has formed a top near the higher boundary of the channel and a bottom near the lower end of the channel. The recent low i.e formed in April 2020 was formed also near the lower end of the channel.

The positive or bullish point to note here is, this time the stock witnessed a decisive breakout from the Descending parallel channel which continued for more than 2 years. These signals change in the medium-term trend from bearish to bullish. The breakout was well supported by the volumes which increases the reliability of the breakout. Post breakout price experience some upmove and thereafter saw minor profit booking and seen taking support near the channel which was acting resistance earlier. (Law of Polarity)

From the above chart attached it is evident how the price has respected the channel lines. From the last 3 weeks, stock seem has formed a base near the support and this week price gave a breakout from the same which is a bullish signal. Also, the breakout has accompanied by supportive volumes. If this mentioned support held well the price likely to resume its prior trend.

Now, drawing a Pitchfork connecting its important swing points, the price has registered breakout from the median line and price has been taking near the same which provides further strong support for the stock. And, if stock materializes well, stock shall ride higher to test the upper trendline of the Pitchfork.

The stock has been trading above all major moving averages like 9,20,50,100,200 which suggests strength in price ad bullish trend in all time frames. Most of the moving averages are converging near the same juncture, as support discussed above which denotes the key support for the stock price.

The other chart attached below focuses on the Momentum Indicator. RSI earlier had surpassed above the falling trendline and now its inching higher finding support near the same. Also, RSI has reversed from the neutral zone (50 levels) and has given positive crossover which confirms the momentum and compliments bullish view in price.

Considering the above price pattern, volumes, and other technical tools price has the potential to scale higher towards 1200-1280-1400 in the medium-term.

The above view holds true until the price does not close below 970 levels. The strong support is visible around 1055-1020 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.