UJJIVAN FIN SERV: RALLY LIKELY TO CONTINUE ...!
This stock has been listed recently a few years back and the sharp selloff witnessed this year brought stock price back below the listing price. This stock piqued my curiosity when last week, price witnessed a wide Gap up the opening of about 20% on the back of some positive news flow.
While analyzing the weekly chart I found stock has been following into one of my favorite setup and I dug more into the same which lead me to conclude, the rally is likely to continue ahead and the price to scale higher in coming weeks.
The stock on the weekly time frame has been in trading in the Parallel descending channel since the inception of the stock price. It has been observed price has peaked out near the upper boundary of the channel and has formed bottom near the lower range of the channel. The recent major bottom formed in March 2020, was also formed at the lower boundary of the channel.
From the chart attached above it is evident that historically how beautifully price has respected the Channel lines. The wide gap up witnessed in the previous week has lead the price to surpass the median channel line which acted as key resistance earlier. Also, the previous week a new sequence of Higher high and higher low has developed which denotes an uptrend in the short to medium-term time frame.
Another chart attached below highlights the action between price and volume in the course of sharp decline and recovery. The Red Box marked focuses on the decline in price with fewer volumes (small volumes bars) whereas, the Green Box marked shows a recovery phase from the lower level which sees an exceptional rise in volumes bars with the price. This hints probable big players are still in the game and recently over the course of upmove shall have added further with the rise in price.
Another chart attached below displayed the Momentum Indicator and Bollinger Bands. The Momentum Indicator is inching higher converging its average and has surpassed the previous readings high which indicate strength in price. Also, the indicator has crossed above the 0 levels after a good amount of time which is a bullish signal and compliments bullish view on price. The price has given breakout from squeeze Bollinger bands which indicates an expansion in volatility to the higher side and supports a bullish view on price.
Considering the above price pattern, volumes, and other technical studies, the price has the potential to scale higher towards the upper boundary of the Descending channel in the medium-term. While immediate resistance comes around 305-354 levels.
The above view holds true until the price does not close below 259 levels. The strong support is visible around 274-267 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.
