Robust Chart Setup !!!

DeltaCorp - Multi-Year Descending Channel Breakout...

The stock enjoyed a great bull run from Feb 2016 to Jan 2018, where price rallied from 50 to almost 400 levels. This tremendous rally was got arrested around 400 levels in Jan-2018, and from thereon the stock tumbled to the lowest level near 54 levels in March 2020. This means the stock almost gave all its gains which were witnessed earlier in the bull run.

The stock reversed strongly taking support near 55 levels and thereafter stock has seen a steady rally with the formation of Higher Highs and Higher Lows. The stock has so far rallied from 55 to 160+ levels post-printing the bottom in March-2020. However, following the chart set up, it suggests the stock has more room to scale higher in months to come. 

The chart attached below is the weekly chart of DeltaCorp, the prolong down move in the stock price from 2018-2020 was seen trading in Descending channel. The stock traded in the Downsloping channel and it was observed that the significant peak was formed around the higher end of the channel line and the previous bottom formed in March-2020 was also exactly placed near the lower end of the channel line.

The stock continued to trade in the channel for almost more than 2 years and in Dec-2020 price finally registered a breakout from the prolonging descending channel which suggests a bullish signal for the stock for the medium-term trend. Post breakout from the channel price rallied a bit and then saw a minor dip to test and find support near its previous resistance line. The price action hints, resumption in prior trend, and going forward price likely to hold this support zone and witness northward rally in coming months.

The next chart attached focuses on medium-term and short-term chart development to gauge the short term trend. The chart displays Pitchfork lines which are drawn connecting its previous 3 significant swing points (Marked 1-2-3). The price recently reversed taking support at the median line of Pitchfork and with that stock has also given a breakout from the probable Bullish Flag price pattern which compliments the bullish view on price and hints price likely to rally to test the higher line of the Pitchfork which is placed around 220-225 levels and coincides with its previous swing high.

The last chart attached highlights the Price-Volumes behavior and Short term moving average to gauge the trend strength of the ongoing rally so far. The price-Volume action is quite promising and robust. The volume has been above average on the updays while the volumes are lower or below average on the down days on consolidation in price, such behavior generally hints the solid strength in the trend. The price has provided respect to the short-term EMA and recently the small corrections has arrested near the average. Such instances basically show the strength in trend and mostly seen in powerful and well-built trend.

Thus following the above studies and Technical tools. I believe the stock has more legs and to rally higher in the coming weeks to test 177-205-225 in short to medium term time frame. While on the downside the support is visible around 154-146 levels. I would be cautious and review my analysis if the price fails to bring upthrust momentum and closes below 139 levels. 

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