Granules India bounces from trendline support

The stock of Granules India Limited has bounced back from the edge of the rising trendline support that is formed by connecting the swing lows from March 2020 and coincides with the 13-day EMA level. The reversal from the support is further justified with strong volumes. Additionally, the stock has formed a sizeable bullish candle, suggesting that the bulls are taking control near the medium-term support.

As the stock is near to its 52-week high, it is trading above all the short and long-term moving averages. The stock is meeting the criteria of Mark Minervini’s trend template. The current stock price is above both 150-day (30-weeks) and 200-day (40-weeks) moving average price lines. Moreover, 30 and 40-weekly averages are trending up and at the same time, they are in the desired sequence. Also, the current stock price is at 98 per cent above its 52-week low and the current price is closer to the 52-week high.

The daily and weekly RSI is in a rising trajectory, which is a positive sign. The weekly MACD stays bullish as it is trading above its zero line and signal line. The histogram is suggesting a pickup in the upside momentum.

Further, the average directional index (ADX), which shows the trend strength, is as high as 31.86 on a daily chart and 25.02 on a weekly chart. Generally, a level above 25 is considered a strong trend. In both the timeframes, the stock is meeting the criteria.

Going ahead, we expect the bias to remain positive as long as the stock sustains above Thursday’s low of Rs 209.25 level. On the higher side, the level of Rs 241, followed by Rs 250.20, would be seen as the next resistance zone for the stock.

On Thursday, the stock of Granules India closed at Rs 226.45 per share, surged by 7.99 per cent from its previous close. The stock opened at Rs 211 per share and hit an intraday high of Rs 229 and a low of Rs 209.25 per share on NSE.