PVR features as Bollinger Band Squeeze pick

PVR Limited has been picked up by our Bollinger Band Squeeze scanner, which suggests that the stock is near a consolidation breakout.

Bollinger Band Squeeze occurs when the volatility falls to low levels and the band narrows. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.

The stock has formed a reversal dark cloud cover candlestick pattern as on June 08, 2020, and thereafter, witnessed a correction. Considering the weekly timeframe, the stock was trading in contracting consolidation for the last five weeks and formed indecisive candles. However, as of now, the price action has narrowed substantially and the stock is likely to give a consolidation breakout in the coming days.

Currently, the stock is trading above its short-term moving averages, i.e. 20-day EMA and 50-day EMA. The leading indicator RSI hovers on the daily timeframe in a neutral region without any bias since the last 29 trading sessions and the daily ADX is currently quoting below 15 mark. This indicates the lack of a clear trend. Other indicators are also mirroring the same image.

Talking purely about the trading levels, the zone of Rs 1,000-Rs 985 level is a crucial support area and the level of Rs 1,080-Rs 1,090 is the resistance zone. A sustainable move on either side would lead to a trending move.