JUBLFOOD features as Bollinger Band Squeeze pick

Jubilant FoodWorks Limited has been picked up by our Bollinger Band Squeeze scanner, which suggests that the stock is near to a consolidation breakout. The Bollinger Band Squeeze occurs when the volatility falls to low levels and Bollinger Bands narrow. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.

The stock had formed a reversal Spinning Bottom like candlestick pattern as on the weekend of August 23, 2019, and thereafter, marked the sequence of higher tops and higher bottoms. Considering the weekly time frame, the stock is trading in a contracting consolidation for the last six weeks. However, as of now, the price action has narrowed substantially and the stock is likely to give a consolidation breakout in the coming days.
 
The major trend of the stock is bullish as it is trading above its weekly pivot and over its long and short-term moving averages, that is, 20-day, 50-day, 100-day, and 200-day EMAs and these moving averages are in an ascending order, which suggests that the trend is strong. The 14-period daily RSI is currently quoting at 60.06 and it has recently given a positive crossover. The daily RSI took support at 48-49 level historically many times, and this time also it bounced exactly from the same level. The stochastic oscillator is also suggesting some bullish momentum as ‘per cent K’ is above the ‘per cent D’. Moreover, on the daily time scale, Know Sure Thing (KST) has given a bullish crossover.

Coming back to the trading levels, the zone of Rs 1,540-Rs 1,550 levels is a crucial support area and the level of Rs 1,645-Rs 1,655 is the resistance zone. A sustainable move on either side would lead to a trending move.