Technical Bits: ICICI Sec features as Bollinger squeeze pick

Vinayak Gangule
/ Categories: Trending
Technical Bits: ICICI Sec features as Bollinger squeeze pick

ICICI Securities Limited was picked by our Bollinger Band squeeze scanner which suggests that the stock is near a consolidation breakout. 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 formed reversal One White Soldier candlestick pattern as on the weekend of May 31, 2019 and thereafter the stock gave a rise up to its multiple resistance zone of Rs. 230 to Rs 235. The stock could not breach the zone and for the last five weeks, it was hovering around the downward sloping trendline resistance. As of now, the price action has narrowed substantially and the stock is likely to give consolidation breakout in the coming days.

 

The long-term trend of the stock is negative, as the stock is trading below its 50-day EMA, 100-day EMA and 200-day EMA. The indicators and oscillators are too poor to comment on. The Average Directional Index (ADX) indicator on the daily time frame quoted around 10.20, which suggests no strength in any directional momentum.

 

A consolidation breakout or breakdown below some important support/resistance level with supportive volumes will lead to a major advance or decline. For the short-term, the zone of Rs. 222- Rs. 225 level will be the crucial resistance for the stock as it is the confluence of downward sloping trendline and long term 100-day EMA level. A follow-through move above this level would lead to an extension of the pull-back toward Rs. 236, followed by Rs. 248. While on the downside, the zone of Rs. 213- Rs. 210 will act as immediate support as the upward sloping trendline is placed in that region, failure to hold this support would lead to further correction up to the level of Rs. 198, followed by Rs. 190 level.

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