FDC gives trendline breakout

The stock of FDC Limited has given a downward sloping trendline breakout, formed by connecting swing highs from April 2020. The breakout was supported by robust volumes.

Additionally, the stock had formed an opening bullish Marubozu candle on the breakout day, which adds strength to the breakout. The opening bullish Marubozu candle has no shadow extending from the open price end of the body. Opening bullish Marubozu candle indicates an extreme bullishness.

As the stock is trading at its 52-week high, it is trading above all the short and long-term moving averages. 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. Talking about the indicators, the MACD line is above the signal line and zero line. The stock's relative strength index (RSI) has reached its highest value in the last 14-days, which is bullish.

Moreover, the average directional index (ADX), which shows trend strength, is at as high as 31.94 on a daily chart and 25.48 on a weekly chart. Generally, level above 25 is considered as a strong trend. In both the timeframes, the stock is meeting the criteria.

In the near-term, the zone of Rs 253-Rs 250 is likely to act as a major support as it is the confluence of 13-day EMA and 20-day EMA. While on the higher side, the level of Rs 293, followed by Rs 320, would be seen as the next resistance zone for the stock.

On Monday, the stock of FDC closed at Rs 272.85 per share, surged by 9.49 per cent. The stock opened at Rs 250.20 per share and hit an intraday high of Rs 281.70 and a low of Rs 250.20 per share on NSE.