Balrampur Chini Mills feature as Bollinger Band Squeeze pick
Balrampur Chini Mills 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 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 hammer candlestick pattern as on the weekend of May 22, 2020, and thereafter, surged sharply up to the level of Rs 141.70. Considering the weekly timeframe, for the last nine weeks, the stock is trading in a contracting consolidation. 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 medium-term moving averages, i.e. 50-day EMA and 100-day EMA. The leading indicator RSI hovers on the daily timeframe in a neutral region without any bias and the daily ADX is also below the 25-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 123-Rs 124 level is a crucial support area and the level of Rs 130-Rs 133 is the resistance zone. A sustainable move on either side would lead to a trending move.