VIP Industries on verge of giving symmetrical triangle breakout

The stock of VIP Industries Limited has formed a reversal three inside up candlestick pattern as on May 29 and thereafter, bounced sharply up to the level of Rs 287.70.

Since the last 31 trading sessions, the stock is trading in contracting consolidation, which resulted in the formation of a symmetrical triangle pattern. As of now, the momentum in prices has been narrowed substantially and its prices have reached near an apex point of the triangle, which suggests that the stock is likely to give a breakout in the coming days.

Further, due to a narrow range, Bollinger Bands have contracted, which indicates an early sign of a bigger move. During the last two trading sessions, the volumes recorded were above the 20-day average, which is a sign of accumulation before the actual breakout happens.

Interestingly, the leading indicator, RSI has given a breakout of the downward sloping trendline, which is a bullish sign. The stock is currently trading above its short-term moving averages, i.e. 20-day EMA and 50-day EMA.

Talking purely about the trading levels, the zone of Rs 245-Rs 248 level is a crucial support area and the level of Rs 272-Rs 274 is a resistance zone. A sustainable move on either side would lead to a trending move.