KPIT Technologies likely to give ascending triangle breakout
KPIT Technologies Limited, in the year 2019, had demerged its engineering division to form a separate entity namely, KPIT Engineering Limited. Post this, the stock plunged around 32 per cent. It was found quoting around Rs 148, which then moved down around Rs 70. This was just in a matter of three months. Further, it did show some recovery but again started its southward journey from January 2020 to form a low of Rs 34. However, after that, it witnessed good recovery. In fact, in September 2020, it did break its previous all-time high of Rs 118. Again, from there, it witnessed a strong correction. Having said, it also recovered from this correction and created a new all-time high of Rs 138. While doing so, it created an ascending triangle pattern and gave a northward breakout.
1. KPIT Technologies is likely to give a northward breakout on the ascending triangle price chart pattern on a weekly timeframe.
2. It gave a breakout even on the daily timeframe.
3. Immediate support and resistance is placed at Rs 126 and Rs 138 levels, respectively.
4. The probability of a pullback, though, cannot be ignored.
The above chart is the weekly chart of KPIT Technologies and as we can see, it is creating an ascending triangle pattern and is also likely to give a breakout. However, this pattern won’t be complete unless we have the breakout on a closing basis i.e. on January 1, 2021, in this case. Therefore, to get more clarity, let us take some cues from the daily chart.
The above chart is the daily chart of KPIT Technologies Limited. As we can see, even on the daily charts, it gave a breakout and even the volumes are rising. Therefore, we can say that there is a high probability of it to give a breakout on the weekly basis too. Having said, it seems to be a good opportunity for the short-term to medium-term swing breakout traders. And for the long-term swing traders, they should add this stock to their watchlist and wait for it to give a weekly close on January 1, 2020 before taking any positions. Having said, the probability of a pullback cannot be ignored. Nonetheless, it is always recommended to have a stop-loss while trading in order to avoid extended losses.
This article is just for understanding purposes and should not be considered as a recommendation. Readers are advised to do their own research before making any investment decision. Further, DSIJ and its authors are not responsible for any kind of losses incurred.