Radico Khaitan bounces from upward sloping trendline support

Considering the daily timeframe, the stock of Radico Khaitan Limited has bounced back from the edge of the rising trend-line support that is formed by connecting swing lows from July 2019. The reversal from the support is confirmed by the above 50-day average volume. Additionally, the stock has formed a sizeable bullish candle on the daily timeframe, which suggest that the bulls are taking control near the long term support.

On Tuesday, the stock managed to close above its weekly pivot and short and long term moving averages, that is, 20-day EMA, 50-day EMA, and 100-day EMA. The 14-period weekly RSI has taken support at 40 level many times before, and this time also it has bounced exactly from the same level. The weekly and daily stochastic oscillator is also suggesting some bullish strength, as %K is above the %D. Moreover, the momentum indicator MACD line has crossed above the signal line, which resulted in the histogram turning positive.

Going ahead, we expect the bias to remain positive as long as the stock sustains above the Tuesday’s low of Rs 298 level. On the higher side, the level of Rs 321, followed by Rs 328, would be seen as the next resistance zone for the stock.

On Friday, the stock of Radico Khaitan closed at Rs 316.50 per share, registering a surge by 5.94 per cent from its previous close. The stock opened at Rs 300 per share and hit an intraday high of Rs 318.75 and a low of Rs 298 per share on NSE.