After being in a severe downtrend for over ten years since its all-time high in February 2013, McLeod Russel is now showing compelling signs of a major trend reversal. A multi-year consolidation phase appears to have ended with a powerful, momentum-driven breakout.
The Breakout: A Shift in Momentum
The stock was locked in a sideways consolidation range since August 2020. However, recent price action signals a decisive shift in control from sellers to buyers:
- Building Strength: Over the past few weeks, the stock began forming a pattern of Higher Lows, an early indication that selling pressure was diminishing and buyers were stepping in at higher prices.
- Resistance Breach: On Friday, October 6th, the stock decisively broke out of a major, multi-year resistance level.
- Explosive Follow-Through: The breakout was followed by extremely bullish action this week, with the stock gapping up at the open and immediately hitting the upper circuit limit each day. This indicates intense buying interest with a complete absence of sellers.
This powerful move is confirmed by key technical indicators. The short-term Exponential Moving Averages (EMAs) are in a positive crossover, and the Relative Strength Index (RSI) is firmly in bullish territory across the Monthly, Weekly, and Daily timeframes.
Outlook and Key Levels
The current momentum suggests a significant new uptrend is underway.
- Bullish Target: If this strong momentum continues, the next logical resistance and potential target for the stock is the ₹85 level.
- Support Level: Should the momentum pause or a pullback occur, the breakout level around ₹35 is expected to act as a strong support zone.
Given the rapid, vertical ascent, traders should watch the price action closely in the coming days for signs of either continuation or short-term exhaustion.
The Breakout: A Shift in Momentum
The stock was locked in a sideways consolidation range since August 2020. However, recent price action signals a decisive shift in control from sellers to buyers:
- Building Strength: Over the past few weeks, the stock began forming a pattern of Higher Lows, an early indication that selling pressure was diminishing and buyers were stepping in at higher prices.
- Resistance Breach: On Friday, October 6th, the stock decisively broke out of a major, multi-year resistance level.
- Explosive Follow-Through: The breakout was followed by extremely bullish action this week, with the stock gapping up at the open and immediately hitting the upper circuit limit each day. This indicates intense buying interest with a complete absence of sellers.
This powerful move is confirmed by key technical indicators. The short-term Exponential Moving Averages (EMAs) are in a positive crossover, and the Relative Strength Index (RSI) is firmly in bullish territory across the Monthly, Weekly, and Daily timeframes.
Outlook and Key Levels
The current momentum suggests a significant new uptrend is underway.
- Bullish Target: If this strong momentum continues, the next logical resistance and potential target for the stock is the ₹85 level.
- Support Level: Should the momentum pause or a pullback occur, the breakout level around ₹35 is expected to act as a strong support zone.
Given the rapid, vertical ascent, traders should watch the price action closely in the coming days for signs of either continuation or short-term exhaustion.
Disclaimer: This analysis is my personal view & for educational purposes only. They shall not be construed as trade or investment advice. Before making any financial decision, it is imperative that you consult with a qualified financial professional.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer: This analysis is my personal view & for educational purposes only. They shall not be construed as trade or investment advice. Before making any financial decision, it is imperative that you consult with a qualified financial professional.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.