Fairchem Speciality gives a trendline breakout

The stock of Fairchem Speciality Limited has given a downward sloping trendline breakout on the daily time frame. This breakout is confirmed by the above 50-day average volumes. With this breakout, the weekly and daily ADX, which shows the strength of the trend, turned upside and moved above the -DI.

As the stock reaches new lifetime highs, it is trading above all the moving averages as well as other trend indicators. All the moving averages are trending upside and they are in sequence. 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 daily RSI (83.26) is in the super bullish zone and it has managed to close above its prior swing high. The daily and weekly MACD stays bullish as it is trading above its zero line and signal line. The MACD histogram suggests a bullish momentum. Moreover, the other volume based indicators like On Balance Volume (OBV) and Money Flow Index (MFI) are also very strong.

Going ahead, we expect the bias to remain positive as long as the stock sustains above Monday’s low of Rs 558.85 level. On the higher side, the level of Rs 655, followed by Rs 719, would be seen as the next resistance zone for the stock.

On Monday, the stock of Fairchem Speciality Limited closed at Rs 630 per share, surged by 14.48 per cent. The stock opened at Rs 558.90 per share and hit an intraday high of Rs 655 and a low of Rs 558.85 per share, on NSE.