RECLTD: Breakout From An Ascending Triangle

Rural Electrification Corporation Limited (RECLTD.IN)

• This stock has now witnessed a breakout from a bullish Ascending Triangle formation.
• The breakout occurred above 127.50, but the stock might still witness some pullback, with the zone of 127-130 potentially acting as support. Once the consolidation is out of way, there is a high probability that the momentum will return to the stock.
• The RSI has marked a fresh 14-period high, which is bullish. It also shows a bullish divergence against the price.
• The daily MACD remains in continuing buy mode; PPO is still positive.
• The On-Balance Volume (OBV ) has marked a fresh high, which is bullish and acts as a volume confirmation.
• The RS Line against the broader NIFTY500 index has reversed its downtrend; it is now moving higher and it has crossed its 50-DMA.
• The 50-DMA, which is presently at 121 has crossed the 200-DMA from below which is at 112 couple weeks back.
• If the present pattern resolves on the expected lines, the stock may test the 148-150 levels. Any move below 122 will be negative for the stock.

Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst
www.EquityResearch.asia

Disclosure pursuant to Clause 19 of SEBI (Research Analysts) Regulations 2014: the Analyst, his Family Members or his Associates hold no financial interest below 1% or higher than 1% and have not received any compensation from the Companies discussed.