Trent registers a strong price volume breakout from its triangle pattern; what does it mean for the traders?

The apparel-retail stock has zoomed over 4% on Monday.

The broader market opened positively amid good global market sentiment. Fresh buying interest has been observed in quality stocks which are at attractive valuations. One such stock is Trent, which has surged over 4% during Monday’s trading session.

Technically, it has registered a strong price volume breakout from its triangle pattern. Such a breakout is considered strongly bullish over the medium term. With this, it has hit a fresh all-time high level of Rs 1541.80 on NSE. The volume recorded happens to be greater than the 10-day, 30-day and 50-day average volume. The breakout is supported by a rising 14-period daily RSI (69.01) which exhibits strong strength in the stock. The MACD had indicated a bullish crossover last week. The OBV is on a rise and shows high buying activity. The ADX also points upwards and shows rising trend strength. The Elder Impulse system has indicated a fresh buy. The TSI and KST indicators demonstrate bullishness. Currently, the stock is about 7% above its 50-DMA and about 26% above its 200-DMA. Overall, the stock is expected to trade higher given such positivity.

On a YTD basis, the stock has jumped 42% and outperformed most of its peers. It is likely to continue its bullish run and momentum traders can take advantage of this.

Good corporate earnings and positive MD&A have fuelled growth prospects in the stock. With the company being fundamentally sound, long-term investors can consider including it in their watchlist to track its further development.

Trent Ltd is a part of the Tata Group and is engaged in the business of retailing which offers clothes, footwear and accessories along with furnishings, artefacts and a range of home accessories at low prices to value-conscious customers in towns across India. With a market capitalisation of about Rs 54000 crore, it is one of the strongest players in its industry.