Metro Brands shares rallied 6 percent after consolidating for eight straight sessions to close at Rs 848 on April 20.
The stock formed a robust bullish candlestick on the daily charts, a healthy sign. The rally also pushed Metro Brands decisively above 50 and 100-day exponential moving averages (EMA), which is another positive sign. The stock has never breached its 200-day exponential moving average (Rs 764) on a closing basis, which acted as a strong support.
Momentum indicator the relative strength index (RSI) at around 60 levels is showing positive crossover on the daily as well as weekly charts.
Moving average convergence divergence (MACD), too, has been trading above the equilibrium line for more than a week period now.
The stock decisively broke out of long downward sloping resistance trendline adjoining record highs (October 6, 2022 - Rs 980.85) and swing high (December 2022 - Rs 913).
Experts' take
Foram Chheda, Technical Research Analyst and Founder of ChartAnalytics.co.in
Metro Brands' stock price peaked at Rs 980 in October 2022 before experiencing a corrective decline, which found support around Rs 740, the same level as the 200-day moving average (MA). The stock then formed a higher bottom, signalling a change in the trend.
Recently, the stock broke out of a downward-sloping trend line, finding support at the 200-day MA and crossing above the 50- and 100-day MA.
Volume has also increased significantly, supporting bullish sentiment. Consequently, buying opportunities may arise at breakout levels of Rs 817, with a stop-loss of Rs 790 and a target of Rs 895.
Vidnyan Sawant, AVP-Technical Research, GEPL Capital
The stock bottomed out near Rs 750-730 range from the medium-term perspective. It is giving a downward slopping trend line breakout on the weekly charts.
On April 20, it formed a big bullish candle with huge volume confirmation, indicating strong participation in the upward momentum.
The stock has immediate resistance at Rs 910 followed by Rs 960. On the other hand, it has strong support at Rs 790 and then Rs 750.
Mehul Kothari, Head of Technical Research, Anand Rathi
The stock confirmed a fresh breakout from the falling trendline and from the previous swing of Rs 835. There is a strong base at Rs 790. Till the time this base remains intact, the stock has the potential to reach Rs 910, which is the next major hurdle.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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