Trendline Breakout Throws Stock 4% Up as ‘Rally Begins’!
Thursday’s session started on an extremely positive note with the benchmark index surging to a new all-time high of 18,887.6, by 9:36 AM IST. So far, all sectoral indices are trading in the green zone, except the index which is down 0.36%.
Nonetheless, it is yet another session to focus on the long opportunities with one counter looking good in today’s session is Route Mobile Limited (NS:). It is an IT company providing a cloud communication platform as a service to business enterprises and has a market capitalization of INR 8,128 crores.
Today, the share price of Route Mobile surged over 4% to INR 1,381 in the first few minutes of the opening. The momentum in the stock has just started to build up as it surged to the highest level since 21 October 2022. However, what makes it a good option for long traders is a clean trendline breakout above the falling trendline resistance on the daily chart.
Image Description: Daily chart of Route Mobile with volume bars at the bottom
Image Source: Investing.com
This breakout has essentially reversed the prior downtrend in the stock, although a closing above the trendline is preferred for which investors need to wait till the session’s close. But looking at a good distance at which the stock is trading above the trendline, there’s a high chance of the expected closing.
The volume for the day so far has been recorded at over 250.8K shares which might not seem much, but it’s the volume for less than an hour of trading, which is already 2x higher than the 10-day average volume of 102K shares. Hence, I would conclude that the volume support is quite sufficient that is backing the breakout (and we have almost a full session to go).
There is resistance at around INR 1,440 from where some selling pressure could be witnessed. This level has worked quite well in the past to stop the stock from rising further, in October 2022. Hence the likelihood of this level working again is high. Therefore long position holders must keep this supply area under the radar. Above it, a rally to INR 1,500 could easily be materialized on the screen.
Talking about the downside, a retracement till INR 1,350 could come which would be an opportunity for participants who have either missed today’s breakout or are waiting for a better level to enter. But structurally, INR 1,275 is a very strong support below which the bullish view would be negated.
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Thursday’s session started on an extremely positive note with the benchmark index surging to a new all-time high of 18,887.6, by 9:36 AM IST. So far, all sectoral indices are trading in the green zone, except the index which is down 0.36%.
Nonetheless, it is yet another session to focus on the long opportunities with one counter looking good in today’s session is Route Mobile Limited (NS:). It is an IT company providing a cloud communication platform as a service to business enterprises and has a market capitalization of INR 8,128 crores.
Today, the share price of Route Mobile surged over 4% to INR 1,381 in the first few minutes of the opening. The momentum in the stock has just started to build up as it surged to the highest level since 21 October 2022. However, what makes it a good option for long traders is a clean trendline breakout above the falling trendline resistance on the daily chart.
Image Description: Daily chart of Route Mobile with volume bars at the bottom
Image Source: Investing.com
This breakout has essentially reversed the prior downtrend in the stock, although a closing above the trendline is preferred for which investors need to wait till the session’s close. But looking at a good distance at which the stock is trading above the trendline, there’s a high chance of the expected closing.
The volume for the day so far has been recorded at over 250.8K shares which might not seem much, but it’s the volume for less than an hour of trading, which is already 2x higher than the 10-day average volume of 102K shares. Hence, I would conclude that the volume support is quite sufficient that is backing the breakout (and we have almost a full session to go).
There is resistance at around INR 1,440 from where some selling pressure could be witnessed. This level has worked quite well in the past to stop the stock from rising further, in October 2022. Hence the likelihood of this level working again is high. Therefore long position holders must keep this supply area under the radar. Above it, a rally to INR 1,500 could easily be materialized on the screen.
Talking about the downside, a retracement till INR 1,350 could come which would be an opportunity for participants who have either missed today’s breakout or are waiting for a better level to enter. But structurally, INR 1,275 is a very strong support below which the bullish view would be negated.