Multiple pattern breakout: Kitex Garments

The technical chart of Kitex Garments is quite unique as it has formed multiple patterns on the daily as well as weekly chart.

On the daily chart, the stock has given a breakout from its symmetrical triangle-like pattern. It is also on the verge of breaking out from its 25-week cup-like pattern. The RSI on the daily timeframe is in the bullish zone. The trend indicator ADX is well above 25 and rising, which indicates a strong trend of the stock. The stock trades above all the short and long term moving averages. Along with this, the Elder Impulse System and Pring’s KST are indicating the bullish nature of the stock. The stock has also outperformed the broader markets, as per the Mansfield Relative Strength indicator. Moreover, the weekly MACD histogram is rising and indicates the potential of the stock on the higher side. The stock has been in a strong uptrend in the last six weeks and above-average volumes have been recorded during this period which validates the bullish bias of the technical parameters.

In the year 2021, the stock had delivered about 88% returns to its investors. In the short period of one month, the stock has reported about 23% increase in its stock value and thus, it has outperformed most of its peers.

Kitex Garments Ltd is a smallcap company engaged in the manufacture of all kinds of garments for exports. Infant wear dominates with over 90% share in production. The company is also in the business segment of fabric and garments. It has consistently reported healthy profits on a YoY basis and company management believes in strong growth in times to come. With a market capital of Rs 1393 crore, it is one of the most promising companies in its sector.

Technical analysis suggests the stock’s strong outlook for the short as well as medium-term, and the stock is expected to be trading higher in the days to come.