Bajaj Finserv gives Bullish Flag pattern breakout

Considering the daily time frame, the stock of Bajaj Finserv Limited has given a breakout of bullish flag pattern, suggesting an upside move in the counter. This breakout was confirmed by the above 50-day average volume.

The flag pattern is a short-term trend continuation pattern that marks a small consolidation before the previous move resumes. A flag is composed of an explosive strong price move that forms the flagpole and is followed by an orderly and diagonally symmetrical throwback, which forms the flag. When the upper trendline resistance of the flag breaks, it triggers the next leg of the trending move.

The stock is trading above its long and short term moving averages. A daily momentum indicator RSI reading is at 61.31 level with a positive crossover, which points towards a positive breath in the stock. The daily stochastic oscillator is also suggesting some bullish momentum as %K is above the %D.

Going ahead, we expect the bias to remain positive as long as stock sustains above the Friday's low of Rs. 8,110.50 level. On the higher side, the level of Rs. 8,440, followed by Rs 8,668.80, would be seen as the next resistance zone for the stock.