Larsen & Toubro Infotech gives trendline breakout

Considering the daily timeframe, the stock of Larsen & Toubro Infotech has given a downward sloping trendline breakout, formed by connecting swing highs since October 2020. This breakout is confirmed by the above 50-day average volume. Additionally, the stock formed a sizeable bullish candle on the breakout day, which added further strength to the breakout.   

Along with this trendline breakout, the stock has also managed to close above the upper Bollinger band level, which is a very bullish sign. Further, the stock is displaying a bullish trend as it is trading above its long and short-term moving averages, i.e. 20-day, 50-day, 100-day, and 200-day EMAs. These moving averages are exactly in an ascending order, which suggests that the trend is strong.  

Interestingly, the leading indicator i.e. the 14-period daily RSI has also given a symmetrical triangle pattern breakout, which is a bullish sign. The daily ADX is currently quoting at 24.63 levels and it is in a rising mode. The -DI is below the +DI. This shows a technical strength in the stock.  

Going ahead, we expect the bias to remain positive as long as the stock sustains above its 20-day EMA level, which is currently quoting at Rs 3,284 level. On the higher side, the level of Rs 3,971 would be seen as the next resistance zone for the stock.  

On Tuesday, the stock of Larsen & Toubro Infotech surged by 5.23 per cent and closed at Rs 3,573 per share. The stock opened at Rs 3,397 per share and hit an intraday high of Rs 3,618 and a low of Rs 3,318.10 per share on NSE.