Polycab India may give a strong breakout soon
Polycab India is engaged in the business of manufacturing and selling wires & cables and fast-moving electrical goods (FMEG) under the ‘Polycab’ brand. On Wednesday, the stock breached its previous 52-week high of Rs 1,182. The stock got listed on exchanges in April 2019 via the initial public offering (IPO) route. The IPO price of the stock was Rs 538 per equity share and was listed at Rs 633, giving a listing gain of around 18 per cent. Further, the stock moved into a correction to create a 52-week low of Rs 525.15. However, the stock is now on the verge of giving a strong breakout.
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Key takeaways:
1. Polycab is likely to give a strong breakout on the weekly charts.
2. On the daily timeframe, it is likely to form a ‘three white soldiers’ candlestick pattern.
3. Its near-term support and resistance is placed at Rs 1,182 and Rs 1,323, respectively.
4. Possibility of a pullback cannot be ruled out.
5. Breakout traders should adhere strictly to their stop-losses.
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The above image is a weekly price chart of Polycab India Limited. As we can see, the stock has given a good breakout from its previous 52-week high level. Further, the price is trading above its 9-week, 20-week, and 50-week exponential moving average (EMA) and takes good support on 9-week and 50-week EMA. Moreover, we can even see that the breakout is at elevated volumes. Also, on the daily timeframe, it formed a ‘three white soldiers’ candlestick pattern. Having said, the chances of a pullback cannot be ruled out, and hence, pullback traders should add this stock to their watchlist and wait for the price to correct near Rs 1,140 to Rs 1,180 levels.
On Wednesday, the stock opened at Rs 1,150.40, made a low of Rs 1,145, and closed at Rs 1,176.10 post making a high of Rs 1,204.95. At the time of writing this article, the stock was trading at Rs 1,280.
Disclaimer:
This article is just for understanding purposes and should not be considered as a recommendation. Readers are advised to do their own research before making any investment decision. Further, DSIJ and its authors are not responsible for any kind of losses caused.