Bajaj Electricals gives trendline breakout

The stock of Bajaj Electricals Limited gives a downward sloping trendline breakout formed by connecting swing highs since August 2020. Further, the breakout is supported by a robust volume of more than 5 times of the 50-day average volume, indicating a strong buying interest by the market participants. The 50-day average volume was 3.15 lakh, while on Thursday, the stock had witnessed a total volume of 17.04 lakh.

Majorly, the stock is displaying a bullish trend as it is trading above its weekly pivot and above its long and short-term moving averages, i.e. 20-day, 50-day, 100-day, and 200-day EMAs. These moving averages are exactly in an ascending order, which suggests that the trend is strong.

Talking about the indicators, the stock's relative strength index (RSI) has reached its highest value in the last 14 days, which is bullish. Also, it has managed to close above its prior swing high. The momentum indicator i.e. the MACD line has recently crossed above the signal line, which resulted in the histogram turning positive. Moreover, the other volume-based indicators like OBV and Money Flow Index are also very strong.

Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the downside, an important support for the stock is placed in the zone of Rs 517-Rs 510, and on the upside, immediate resistance is seen at Rs 574.

On Thursday, the stock of Bajaj Electricals surged by 6.10 per cent and closed at Rs 549.35 per share. The stock opened at Rs 519.50 per share and hit an intraday high of Rs 554.25 and a low of Rs 519.50 per share on NSE.