Finolex Industries gives falling wedge pattern breakout

The stock of Finolex Industries Limited has given falling wedge pattern breakout on daily time frame. The breakout was supported by strong volumes. Additionally, the stock formed a sizeable bullish candle on the breakout day, which adds strength to the breakout.

If the falling wedge pattern appears in a downtrend, it is considered as a reversal pattern. It occurs when the price is making lower highs and lower lows, which form two contracting lines. The falling wedge usually paves the way for a reversal on the upside.

The major trend of the stock is bullish as it is trading above its weekly pivot and above its long-term and short-term moving averages, i.e. 20-day, 50-day and 100-day EMAs. The leading indicator RSI is in the bullish zone and the MACD is above zero line and signal line. The stochastic oscillator’s %K is just above the %D on the daily chart. Additionally, the ADX is very strong at 47.10. The -DI is much below the +DI and ADX is above the -DI and +DI. This shows the technical strength in the stock.

Going ahead, the 100-day EMA is likely to act as immediate support which is currently quoting at Rs. 492.35 level, while the major support is placed in the zone of Rs. 484-482 as it is the confluence of short-term 20-day EMA and the downward sloping trendline support. On the higher side, any sustainable move above the level of Rs. 520 is likely to open up gates for further rally towards the levels of Rs. 550, followed by Rs. 565.

On Tuesday, the stock of Finolex Industries closed at Rs. 515 per share, surged by 5.72 per cent. The stock opened at Rs. 486.30 per share and hit an intraday high of Rs. 518.80 and a low of Rs. 485 per share on BSE.