Happiest Minds gives breakout of continuation pattern
Happiest Minds Technologies Limited, a mindful IT company has witnessed a correction of over 22 per cent from its listing day's high. However, after forming a low of Rs 307, the stock has marked the sequence of higher tops & higher bottoms. Currently, the stock is trading at Rs 594.55, which is 93.66 per cent up from its 52-week low.
On Thursday, the stock had given the breakout of bullish pennant pattern on the daily chart. This breakout was confirmed by more than double its 50-day average volume. The 50-day average volume is 33.57 lakh while on Thursday, the stock had witnessed a volume of 79.37 lakh.
The pennant is a short-term trend continuation pattern, and it has conical bodies that are formed during the period of consolidation. Price consistently reaches higher lows and lower highs, creating two converging trendlines that form this conical shape. The breakout above the downward sloping trendline signals that the previous uptrend has resumed.
Currently, the stock is trading above its short and medium-term moving averages. The 20-day EMA and 50-day EMA are in the rising mode, which is a bullish sign.
Interestingly, on Thursday, the +DI had surged above the ADX, which is a bullish sign. At the same time, the -DI had declined further, which indicates that the bears are losing their control. Currently, the ADX is quoting at 30.06 on the daily chart while the +DI is above the level of 35. The stock’s relative strength index (RSI) has given a positive crossover on the daily chart and it has given breakout of downward sloping trendline resistance. Moreover, the MACD is on the verge of giving a positive crossover. The other momentum indicators are also painting a bullish picture for the stock.
According to the measure rule of the bullish pennant pattern, the first resistance for the stock is placed at Rs 660. While on the flip side, the 20-day EMA is likely to provide a cushion in case of any immediate downside. The 20-day EMA is currently placed at Rs 533.05 level.
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.