M&M in top gear after breaking out of downward channel

The stock of M&M on NSE had opened at Rs 761 and settled at Rs 797.7, up by 5.86 per cent. The stock formed one of the most bullish candles since April 13.   

The stock has broken out of a downward channel along with a higher volume. It has closed above the prior minor swing high as well as above the 20-DMA decisively. It has formed a strong base between the zone of Rs 731 and Rs 736 and bounced strongly from lower levels.   

The RSI is also above the long consolidation zone. The MACD has given a fresh buy signal. The +DMI moved above the -DMI as well as the ADX. The ADX is at 19.69, which needs to gain strength. The Elder impulse system has given a bullish structure. Pring's KST also gave a buy signal. It moved above the Anchored VWAP support. In short, the stock looks bullish. However, the 50-DMA is likely to act as a resistance immediately; hence, momentum traders could keep a close eye on 50-DMA as sustaining above that could lead to continuous upmove.    

On the options’ front, the stock has seen a massive addition of 3.76 lakh shares in the open interest in the 800 Call option on Tuesday. With this, the maximum open interest concentration is seen at the 800 Call option itself with a total open interest of over 11 lakh shares.