Stock watch: Grasim Industries breaks out from consolidation

Grasim Industries is continuously in a good uptrend making higher highs and higher lows after making a low of 380.45 in March 2020. It made a recent higher high of 1,798.4 on October 18, 2021. Post this, the stock started making a series of lower high and lower lows on lower time frames thereby trading in consolidation. Having said that, on October 25, 2021, the stock made a higher low of 1,669.15 on daily charts. Whereas the stock finally breaks out from the flag like chart pattern on November 1, 2021, with increased volumes. 

Above is the daily chart of Grasim Industries.

Grasim Industries is likely to face immediate resistance at 1798.4 levels, whereas its immediate support zone is likely to be between 1,694.3-1,669.15. Looking at its moving averages, the stock is currently trading above its 9-Day, 20-Day and 50-Day Exponential Moving Average (EMA). Moreover, its 50-Day EMA works wonderfully as its trailing support. That being said, the stock is likely to witness a potential pullback from current levels as suggested by the Bollinger band. The stock is presently trading near the upper Bollinger band.  

Speaking about indicators, the 14-Day Relative Strength Index (RSI) notching high and is trading above its 20-Day EMA of 62. Even the Moving Average Convergence Divergence (MACD) is showing a positive crossover in the positive territory on the breakout. However, few indicators are suggesting a potential pullback. The price on the shorter time frames is trading below its Parabolic SAR indicating a probable pullback from current levels. Also, the Commodity Channel Index (CCI) has inched above the 100 level, indicating an overbought situation.  

Grasim Industries is likely to report its earnings for the quarter ended in September 2021 by November 11, 2021. It would be interesting to understand how price behaves. However, as of now from the analysis, it seems that the stock is in a good uptrend and is likely to continue the same as there are no signs of a trend reversal.  

However, a few technical indicators such as Bollinger band, Parabolic SAR and CCI is pointing towards a potential pullback from current levels.

At the time of writing, Grasim Industries was trading at 1,778.5.