Dr Lal PathLabs gives trendline breakout

The stock of Dr Lal PathLabs Limited has formed a hammer candlestick pattern as on March 24, 2020, and thereafter, marked the sequence of higher tops & higher bottoms. From the low of Rs 1,179.55, which was registered on March 24, 2020, the stock has gained almost 104 per cent.  

Currently, the stock has given a downward sloping trendline breakout on the daily timeframe, formed by connecting swing highs from October 2020, which indicates a further upside momentum. This breakout is confirmed by the above 50-day average volume. Along with this breakout, the stock has also managed to close above its upper Bollinger band level and started band walk.  

Currently, the stock is trading above its short and long-term moving averages. These moving averages are exactly in the desired sequence, which suggests that the trend is strong.   

Interestingly, on both the weekly and the daily chart, the leading indicator is in a super bullish range as per the RSI range shift rules. The daily MACD stays bullish as it is trading above its zero line and signal line. The histogram is suggesting a pickup in the upside momentum.   

The daily ADX is currently quoting at 21.82 and it is in a rising mode, which suggests that the trend is yet to develop. The directional indicators continue in the ‘buy’ mode as +DI continues above the –DI.   

Going ahead, we expect the bias to remain positive as long as the stock sustains above the zone of Rs 2,275-Rs 2,250 levels. On the higher side, the level of Rs 2,433, followed by Rs 2,488 would be seen as the next resistance zone for the stock.    

On Friday, the stock of Dr Lal PathLabs surged by 4.42 per cent and closed at Rs 2,407.20 per share. The stock opened at Rs 2,319.20 per share and hit an intraday high of Rs 2,425 and a low of Rs 2,310 per share on NSE.