Maharashtra Seamless is on the verge of giving trendline breakout

The stock of Maharashtra Seamless Limited has given a downward sloping trendline breakout as of October 04, 2021, and thereafter witnessed a strong upside of 55% in just 10 trading sessions.

After registering the high of Rs 544.90, the stock witnessed a throwback. During this throwback, the volume was mostly below the 50-day average volume, which suggests its routine decline after a robust move. The throwback is halted near the 38.2% Fibonacci retracement level of its prior upward move (Rs 312.65-Rs 544.90).

Since the last couple of trading sessions, the stock is oscillating in a narrow range. Due to the narrow range, the Bollinger band has been contracted significantly on the daily chart, which is an early sign of the explosive move.

Talking about moving averages, the stock is comfortably placed above its key moving averages and they are in the desired sequence, which suggests the trend is strong. These averages are edging higher, which is also a bullish sign. The stock is 7.16% above the 20-day EMA and 21.50% above the 50-day EMA. The stock is meeting Daryl Guppy’s multiple moving averages set up rules.

The 14-period RSI on the daily and weekly timeframe is in bullish territory. Furthermore, in the recent sideways to corrective mode the RSI never breached its 60 mark, which indicates that the stock is in a super bullish range as per RSI range shift rules. The daily RSI is on verge of giving positive crossover while the daily stochastic has already given positive crossover.

The Average Directional Index (ADX), which shows trend strength, is as high as 33.22 on a daily chart and 41.23 on a weekly chart. Generally above 25 levels considered as the strong trend. In both time frames, the stock is meeting the criteria.

Currently, the stock is on verge of giving a downward sloping trendline breakout formed by swing highs from October 19, 2021. Any sustainable move above the zone of Rs 530-Rs 535 will lead to a sharp upside in the stock. On the downside, the 20-day EMA will be the major support for the stock.