Sequent Scientific gives cup & handle pattern breakout

The stock of Sequent Scientific Limited has given a cup & handle pattern breakout on the daily timeframe. This breakout is supported by robust volumes. The length of the cup with handle pattern was 42 trading sessions while the depth of the pattern was nearly 19 per cent. 

The cup & handle pattern is a bullish continuation pattern, which indicates a consolidation period, followed by a breakout.

With this pattern breakout, the 14-period weekly RSI has also given a positive crossover, which is a bullish sign. Interestingly, during the formation of the cup & handle pattern, the weekly RSI never breached its 60 mark, which indicates that the stock is in a super bullish range as per the RSI range shift rules.

Talking about the moving averages, the stock is currently trading above its short and long-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.

Going ahead, we expect the bias to remain positive as long as the stock sustains above the zone of Rs 158-Rs 160 level. On the higher side, according to the measure rules of the cup & handle pattern, the level of Rs 182 would be seen as the next resistance zone for the stock.

On Monday, the stock of Sequent Scientific Ltd surged by 5.38 per cent and closed at Rs 168.60 per share. The stock opened at Rs 160 per share and hit an intraday high of Rs 171.90 and a low of Rs 159.60 per share on NSE.