Is Lupin set for a breakout?

The stock of Lupin Limited has formed a bullish pin bar candlestick pattern as on the weekend of March 13, 2020, and thereafter, marked the sequence of higher tops & bottoms. From the low of Rs 504.75, the stock has gained nearly 122.35 per cent in 27 weeks. However, after registering a high of Rs 1,122.30, the stock slid into a consolidation.   

Currently, the stock is on the verge of giving a downward sloping trendline breakout on the weekly chart. On the chart of relative strength comparison with Nifty 500 and Nifty Pharma index, the stock has eventually loosened its downside momentum and started moving higher, which is a bullish sign.    

In addition, dramatically increased volume on the daily chart indicates that there was a good chance of taking out the trendline resistance.  

The momentum indicators and oscillators are also supporting the overall bullish price structure. The weekly, as well as the daily RSI, is in a rising mode, which is a bullish sign. Interestingly, on the higher timeframe, i.e. monthly, the 14-period RSI has surged above the 60 mark for the first time since December 2015. Further, since the last 20 weeks, the 200-week EMA has started edging higher, which is also a bullish sign.     

So, summing up, all the above factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the upside, trendline resistance is placed in the zone of Rs 1,110-Rs 1,120 level. While on the downside, 20-day EMA is likely to provide a cushion in case of any immediate downside.