Bharat Financial: Bollinger band squeeze pick
Bharat Financial Inclusion gets picked up by our Bollinger Band Squeeze scanner, suggesting that a consolidation breakout is expected in the near-term. The Bollinger Band Squeeze occurs when volatility falls to low levels and the Bollinger Bands narrow. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.
The stock is oscillating in rising channel since July 2016. The stock took support of lower end of the rising channel on October 31, 2018, thereafter, bounced sharply till 200-day EMA, since then the stock is trading with gradual lower tops and lower bottoms.
Currently, the stock is hovering around lower end of the rising channel from the last 5 weeks. As of now, the price action has narrowed substantially and stock is likely to give consolidation breakout in the coming days. Indictors and oscillators are too poor to comment on. However, stock had formed bullish engulfing candle on February 14, 2019, which suggests bullish bias.
A consolidation breakout or breakdown below some important support/resistance level with supportive volumes will lead to a major advance or decline. For any further upside, the stock needs to give a close above upper Bollinger band, which is currently placed at Rs 964.25. While on the downside, the zone of Rs 890-Rs 900 is likely to act as short term support, as lower end of the rising channel is placed in that region, failure at this support would lead to further correction up to the level of Rs. 825.