Deepak Nitrite gives cup and handle breakout

Vinayak Gangule
/ Categories: Trending
Deepak Nitrite gives cup and handle breakout

The stock of Deepak Nitrite Limited has given a cup & handle pattern breakout on the daily timeframe. This breakout is supported by robust volumes. The length of the cup with handle pattern was of 54 trading sessions and the depth of the pattern was 19 per cent. 

The cup & handle is a bullish continuation pattern, indicating a consolidation period and followed by a breakout.

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 the 150-day (30-weeks) and 200-day (40-weeks) moving average price lines. Moreover, the 30 and 40-weekly averages are trending up and at the same time, they are in the desired sequence.

Talking about the indicators, the RSI closed above the prior swing high in a bullish zone. It is also making higher highs and higher lows. The indicator is exactly moving along with the price. The other volume-based indicators like on-balance volume (OBV) and money flow index (MFI) are also very strong. Further, the trend strength indicator ADX is at a healthy level of 22.11 and directional indicators continue in the ‘buy’ mode as +DI continues above –DI.

Going ahead, we expect the bias to remain positive as long as the stock sustains above Friday’s low of Rs 545 level. On the higher side, the level of Rs 620, followed by Rs 655, would be seen as the next resistance zone for the stock.

On Friday, the stock of Deepak Nitrite surged by 7.58 per cent and closed at Rs 592.85 per share. The stock opened at Rs 548.70 per share and hit an intraday high of Rs 599 and a low of Rs 545 per share on NSE.

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