Nesco features as Bollinger Band squeeze pick

Nesco Ltd was picked by our Bollinger Band squeeze scanner which suggests that the stock is near a consolidation breakout. The Bollinger Band squeeze occurs when volatility falls to lower levels and the Bollinger Bands narrow. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.

The stock had given a downward sloping trendline breakout as on weekend of March 29, 2019 and thereafter, it marked a sequence of higher tops and higher bottoms. Currently, the stock is hovering around upward sloping trendline support since the last five weeks. However, as of now, the price action has narrowed substantially and the stock is likely to give a breakout in the coming days.

The short and long-term trend is bullish, as the stock is trading above its 20-day EMA, 50-day EMA, 100-day EMA and 200-day EMA. The leading indicator 14-period RSI is currently quoting at 51.87 and it is trading above its 9-day average. The daily MACD stays bullish as it is trading above its zero line since last 9 trading sessions.

Going ahead, it’s important for the stock to sustain and close above the resistance zone of Rs. 545-555 level. A sustainable move above the level of Rs. 555 is likely to open up gates for further rally towards the levels of Rs. 570, followed by Rs. 585. While on the downside, the stock has strong support in the zone of Rs. 515-510 level.