This stock has been on my radar for the last couple of weeks as chart structure signals good strength and promising price action The stock has shown strong momnetum this week and its looks like the sideways consolidation post strong move is about to end and the price is ready to hit the roof.
As shown in the chart below, it is evident that the price witnessed the monster rally from August 2014 - Jan 2016, where the price increased multi-fold from 35 to almost 300 levels. However, post that the stock has turned sideways and from last many years has been trading in a wide range (130-300).
Analyzing the overall chart, the strong and positive signal is that the big consolidation has taken place above its previous multi-years resistance zone. Generally, such setups are bullish in nature and increase the probability of breakout from the range on the higher side. If the consolidation breakout occurs on the higher side (which is expected to happen) this would lead the price to enter the new trading zone and price to scale further higher.
The next chart attached below highlights the bullish price pattern formations. The stock registered breakout from Descending Broadening Right Angle price pattern which continued for about a year. The breakout occurred around Aug 2020 with the formation of a wide Bullish Candlestick pattern and with supportive volumes which increases the reliability of the breakout.
Post breakout from the said pattern price witnessed some rally and then turned into hibernation mode which seems like a Triangle pattern. This week price has given a breakout from the triangle pattern with the surge in volumes. Thus, it hints price has absorbed its previous sharp rally move and has gathered the strength to scale further higher to challenge its previous all-time high levels.
The next chart attached below Displays, Moving Averages and Technical Indicators to gauge the momentum and strength in price trends. From the chart, it is evident that price surpassed and trading comfortably above 20/50/100/200 Moving averages which signal a bullish trend in the short to medium term. The first technical indicator shown is ADX DI+-, which displays a stronger trend in price as the DI+ line has given positive crossover from DI- line, and trading above 20 levels. Also, recently ADX line has given crossover from DI- line and facing northward which is a bullish sign and compliments the bullish view on price. The momnetum indicator, RSI has also given a breakout from the bullish pattern which hints at bullish momnetum in price.
Thus following the above technical studies, I believe the stock more room the stage higher and potential to defiance its previous all-time high levels. Thus, the view discussed above unfolds well as per expectations the stock has the potential to rally higher towards 285-310-360 in short to medium-term time horizon. On the lower side, the support is visible around 244-232 levels while any close below 217 levels would negate the above analysis.
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