Britannia Industries gives channel breakout

The stock of Britannia Industries Ltd has given a downward sloping channel breakout on the weekly chart. This breakout was confirmed by the above 30-week average volume. The big volume on the breakout implies the urgency of buying.     

Additionally, the stock has formed a sizeable bullish candle on the breakout week, which adds strength to the breakout. The bullish candle formation has come along with a significant rise in the weekly range. The last 10-week average is 148.60 points, whereas, last week’s range was almost 414.50 points. Since the last couple of trading sessions, the stock has started outperforming the benchmark indices.   

Currently, the stock is trading above its short and long-term moving averages. These averages are in the desired sequence. Further, the slope of 100-week EMA and 200-week EMA has started edging higher.    

The momentum indicator in the weekly timeframe i.e. the relative strength index (RSI) has surged above its prior swing high, which is a bullish sign. Currently, it is quoting at 65.50 level and also, trading above its nine-week average. The MACD line just crossed the signal line and the histogram became green. Further, the daily ADX (29.10) is showing strength in the trend. The sharp surge in +DI on daily as well as the weekly chart is suggesting the trend to strengthen further.     

The stock has strong support in the zone of Rs 3,660-Rs 3,705 as it is a confluence of the short-term 8-day as well as 13-day EMA level. On the upside, the prior swing high of Rs 4,010 is likely to act as an immediate hurdle for the stock.     

On Friday, the stock of Britannia Industries Ltd surged 4.70 per cent and closed at Rs 3,895.85 per share. The stock opened at Rs 3,661 per share and hit an intraday high of Rs 3,966.25 and a low of Rs 3,640 per share on BSE.