AIA Engineering gives trendline breakout

The stock of AIA Engineering Limited has given a downward sloping trendline breakout on the weekly scale. The breakout was supported by relatively higher volumes. Additionally, the stock formed a sizeable bullish candle on the breakout week, which adds strength to the breakout.

As the stock reaches new lifetime highs, it is trading above all the moving averages as well as other trend indicators. The stock is meeting Daryl Guppy’s multiple moving averages set up rules, as it is trading above both, the short and long-term moving averages. All the major indicators also suggest a bullish momentum in the stock. The weekly RSI (67.93) is in the bullish zone. The daily and weekly MACD is above the zero line and signal line. The MACD histogram suggests a bullish momentum.

The stock is clearly uptrend and the trend strength is extremely high. The Average Directional Index (ADX), which shows trend strength, is as high as 56.05 on a daily chart and 28.77 on a weekly chart. Generally, above 25 levels is considered as a strong trend. In both time frames, the stock is meeting the criteria.

Going ahead, we expect the bias to remain positive as long as the stock sustains above the Friday’s low of Rs 1,788 level. On the higher side, the level of Rs 2,000 would be seen as the next resistance zone for the stock.

On Friday, the stock of AIA Engineering Limited closed at Rs 1,955 per share, surged by 7.56 per cent. The stock opened at Rs 1,826.60 per share and hit an intraday high of Rs 1,960 and a low of Rs 1,788 per share on NSE.