SunFlag Iron and Steel - Bullish reversal pattern breakout !!!
The Metal/Steel sector as a whole has been shinning for the last couple of months and major stocks have robust chart patterns with strong price action. However, among the metal basket, I have chosen a small-cap stock which has been on my radar from the last couple of weeks.
The SunFlag and Iron and Steel stock topped out around 100 levels in Feb 2018 and from there on every rise in price was sold into. The stock remained under pressure and made a low below 23 levels in August 2019. The sharp selloff halted near 23/- and post that the stock went into hibernation mode. The stock traded in a wide sideways range from around 50 to 25 levels. Generally, The bears used to take control when the price comes near 50 levels and similarly bulls take the charge when price reaches near 25 levels.
After consolidating in the range for more than 1 and half year, previous week price registered a decisive breakout from the same which suggests a change in trend from sideways to bullish. If the price-pattern unfolds well as per expectations price likely to scale higher in the coming months.
From the attached chart, it is evident how the stock has registered breakout forming wide bullish range candlestick which suggests strong bulls force. Also, the breakout has accompanied by a sharp rise in volumes which increases the reliability of the breakout and compliments bullish view on pice.
Another chart attached below shows the price Momentum indicator in the lower panel. The momentum indicator has surpassed its previous high reading which signals strength in price. Also, MACD has resumed its upmove after converging around its moving average which is a bullish signal and compliments bullish view on price.
Considering the above price pattern, volumes, and other technical tools price has the potential to scale higher towards 62-75-85 in the medium-term.
The above view holds true until the price does not close below 44 levels. The strong support is visible around 52-49 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.
