Ramkrishna Forgings gives Inverted Head and Shoulders breakout

The stock of Ramkrishna Forgings Limited has given a breakout of Inverted Head and Shoulders pattern on the daily timeframe. This breakout was confirmed by the more than 50-day average volumes. Additionally, the stock had formed opening bullish Marubozu candle on breakout day, which adds strength to the breakout. The opening bullish Marubozu candle has no shadow extending from the open price end of the body. Opening bullish Marubozu candle indicates extreme bullishness. The inverted head and shoulders pattern occurs after an extended downward move. It represents a possible exhaustion point in the market where possible reversal may occur.
 
With this Inverted Head and Shoulders pattern breakout, the stock has also managed to close above its weekly pivot and above its crucial short-term moving average, that is, 50-day EMA. Among the momentum indicators, the 14-period daily RSI is currently quoting at 70.21 and it is in the bullish zone. The other volume-based indicators like OBV and Money Flow Index are also very strong. Moreover, the trend strength indicator ADX is at a healthy level of 24.47. The directional parameter +DI is much above the -DI.
 
Going ahead, the stock has immediate support in the zone of Rs. 303.45-298.60 as the short term 8-day EMA and 13-day EMA are placed in that region while the major support is placed in the zone of Rs. 285-283 as it is the upward sloping trendline support is placed in that region. On the higher side, any sustainable move above the level of Rs. 355 is likely to open up gates for further rally towards the levels of Rs. 375, followed by Rs. 390.
 
On Monday, the stock of Ramkrishna Forgings closed at Rs. 335.50 per share, up by 11.91 per cent. The stock had opened at Rs. 300.60 per share and hit an intraday high of Rs. 354.50 and a low of Rs. 300.60 per share on NSE.