Pidilite Industries gives trendline breakout

After registering a high of Rs 1,517, the stock of Pidilite Industries Limited has witnessed a correction. The correction is halted near the 61.8 per cent Fibonacci retracement level of its prior upward move (Rs 1,306.95-Rs 1,517). After registering a low of Rs 1,390, the stock has initiated its northward journey.  

On Monday, the stock has given a downward sloping trendline breakout on the daily timeframe formed by connecting swing highs from June 2020. This breakout is confirmed by the above 50-day average volume. Further, the stock has also managed to close above its upper Bollinger band level and started band walk, which is a bullish sign.

The major trend of the stock is bullish as it is trading above its weekly pivot and above its long and short-term moving averages, i.e. 20-day, 50-day, 100-day, and 200-day EMAs and these moving averages are exactly in an ascending order, which suggests that the trend is strong. Talking about the indicators, the stock's Relative Strength Index (RSI) is in a super bullish zone in the daily timeframe and has also managed to close above its prior swing high.

Interestingly, the daily RSI has also given a downward sloping trendline breakout. The daily MACD stays bullish as it is trading above its zero line and signal line.

Going ahead, the 20-day exponential moving average is likely to act as a strong support zone for the stock, which is currently placed at Rs 1,471.85 levels. While on the upside, the prior high of Rs 1,584 will be the major hurdle for the stock.

On Monday, the stock of Pidilite Industries closed at Rs 1,536 per share, surged by 3.70 per cent. The stock opened at Rs 1,486 per share and hit an intraday high of Rs 1,542 and a low of Rs 1,481.25 per share on NSE.