Advanced Enzyme Technologies gives triangle breakout
The stock of Advanced Enzyme Technologies Limited has formed a hammer candlestick pattern as on the weekend of March 27, 2020 and thereafter, marked the sequence of higher tops & higher bottoms. The stock has witnessed over 292 per cent upward momentum from the low of Rs 98.10 level.
However, as of October 08, 2020, the stock had formed a reversal bearish engulfing candlestick pattern on the daily chart and thereafter, slide into a consolidation. During the consolidation phase, the stock has formed a symmetrical triangle pattern on the daily chart.
On Monday, the stock has given a symmetrical triangle breakout on the daily chart. This breakout is confirmed by a robust volume of over seven times of the 50-day average volume, indicating a strong buying interest by the market participants. The 50-day average volume was 2.45 lakh, while on Monday, the stock has witnessed a total volume of 17.61 lakh. Further, the stock has formed an opening bullish Marubozu candlestick pattern on the breakout day, which indicates extreme bullishness.
In addition to this, the ADX, which shows the strength of the trend, turned upside and moved above the -DI. This is a very bullish sign.
Currently, the stock is trading above its short and long-term moving averages. These averages are exactly in the desired sequence, which indicates that the trend is strong. Talking about the indicators, the RSI is in a bullish territory in both the weekly and the daily chart. The daily MACD is above the zero line and the signal line. The MACD histogram suggests bullish momentum. And most importantly, the MACD line has crossed the prior swing highs.
Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias.
On the downside, the 8-day EMA level is likely to act as immediate support for the stock, which is currently placed at Rs 335.05 level. While on the upside, the level of Rs 368, followed by the prior high of Rs 384.70, will act as a crucial resistance for the stock.
On Monday, the stock of Advanced Enzyme Technologies Ltd closed at Rs 364.35 per share, surged by 8.99 per cent. The stock opened at Rs 335.05 per share and hit an intraday high of Rs 367.90 and a low of Rs 335.05 per share on NSE.