Asian Paints bounce from upward sloping trendline support

Considering the weekly time frame, the stock of Asian Paints Limited has bounced back from the edge of the upward sloping trendline support, which is formed by connecting the swing lows from July 2019. The reversal from the support is further justified with strong volumes. Additionally, the stock has formed a bullish candle with a long lower shadow, suggesting that the bulls are taking control near the long-term support.

With this, the stock has also managed to close above its short-term moving average, i.e. 20-DMA after 14 trading sessions. The leading indicator, 14-period daily RSI, is currently quoting at 49.88 and it is in a rising trajectory. The weekly RSI has also bounced from the level of 40. The daily stochastic oscillator is also suggesting some bullish strength as per cent K is above the per cent D.

Going ahead, the level of Rs 1,537 is likely to act as an immediate support. A major support is placed in the zone of Rs 1,500-Rs 1,470 as upward sloping trendline support is placed in that region. On the higher side, the level of Rs 1,673, followed by Rs 1,718, would be seen as the next resistance zone for the stock.

On Friday, the stock of Asian Paints closed at Rs 1,617.85 per share, surged by 2.72 per cent. The stock opened at Rs 1,571 per share and hit an intraday high of Rs 41,624.75 and a low of Rs 1,556 per share on BSE.