Linde India meets the trend template of Mark Minervini

In the last week of March 2020, the stock of Linde India Limited has marked the low of Rs 401 and thereafter marked the sequence of higher tops and higher bottoms. From the low of Rs 401, the stock has gained 634% in 78 weeks. After registering the high of Rs 2945, the stock has witnessed a minor throwback. During this throwback phase mostly the volume is below 50-weeks average volumes, which suggest it is just routine decline after a robust move. 

The throwback is halted at 50% Fibonacci retracement level of its prior upward move (Rs 1564.10-Rs 2945) and it coincides with the 20-week EMA level. The stock has formed a strong base near the support zone and in the current week, it has given a 13-weeks base pattern breakout on the weekly chart. This breakout was confirmed by above 50-weeks average volume.

Currently, the stock is meeting the criteria of Mark Minervini's trend template. The current market price of the stock is above the 150-day (30-week) and the 200-day (40-week) moving averages. The 150-day moving average is above the 200-day moving average. Since the last 401 trading sessions, the stock is trading above its 200-day moving average. Currently, it is trading above its 200-day SMA by 29.38%.

The 50-day (10-week) moving average is also above both, the 150-day as well as 200-day moving averages. The current stock price is above the 50-day moving average. Also, the current price is 213% above its 52-week low and currently, it is trading 6% below its all-time high.

The momentum indicators and oscillators are also supporting the overall price action. On the weekly chart, the RSI has given a bullish crossover and it is in rising mode. The daily RSI is also in bullish territory. On the weekly chart, the fast stochastic is trading above its slow stochastic The trend strength is very strong as ADX is at 49.98, and it is above the +DMI & -DMI. Moreover, Martin Pring’s long term KST set-up has also given a buy signal.

Considering the robust technical structure of the stock we believe it is likely to touch new highs. On the downside, the 20-day EMA is likely to provide the cushion in case of any immediate decline. The 20-day EMA is currently placed at Rs 2570 level.