In the mid-week session, Nifty opened gap down but the index bounced back from day’s low, recovered all points and is currently trading around the opening levels of the last trading session. Capital goods sector is doing quite well from last few trading sessions and follow up buying has been witnessed during Wednesday’s session. One stock from the same sector showed strong bullish moves as it rallied more than 50% in 3 days, only to register a technical breakout on weekly and daily charts.
The stock is Indo Tech transformers Ltd, engaged in the manufacture and sale of transformers. Its products include distribution, power, large power and skid mounted substations transformers, mobile substation transformers and substations. The company was founded in 1976 and is headquartered in Kancheepuram, India.
Technically, on monthly charts, it formed trend reversal pattern named “Double bottom” kind of formation in which low of August 2013 (Rs 47.65) and May 2020 (Rs 68.30) will act as bottom support for now. Minimum possible targets of this pattern will be around Rs 450 which is almost 50% higher from current level.
On weekly charts if we draw the trendline from the highs of mid-week of July 2021 (Rs 292.55) and first week of November 2022 (Rs 235) we will get the trendline of continuation pattern named “Up flag pattern”. Minimum possible targets of this pattern will be around Rs 400 which is more than 20% higher from current level.
On daily charts if we draw the trendline from the highs of April 26, 2023 (Rs 209) and May 11, 2023 (Rs 210.40) we will again get the trendline of continuation pattern named “Up flag pattern”. Considering such bullish technical setup, the stock is expected to produce positive momentum in times to come.
Swing traders include this stock in their watchlist for upcoming trading sessions.