Stock watch: Prince Pipes gives a multi-week breakout

Prince Pipes & Fittings Limited provides integrated piping solutions and manufactures multi polymer products. Established in 1987, initially, it used to only manufacture PVC products. Gradually it started to engage in the manufacturing of polymer piping solutions. Presently, it mainly manufactures four types of polymers namely CPVC, UPVC, HDPE and PPR.  

Prince Pipes came out with an Initial Public Offering (IPO) in December 2019 and raised Rs 500 crore via 50 per cent was Offer for Sale (OFS) and 50 per cent fresh issue. Though the offer price was at Rs 178 per equity share, it failed to provide any listing gains to its investors. On a listing day, it made a high of 174.3 and closed at 163.5. That being said, long-term investors are indeed at the benefit, as over the period it has had a remarkable journey as is currently trading at 847, around 376 per cent gain for IPO investors. 

Above is the weekly chart of Prince Pipes & Fittings Limited.

The stock began to rally from June 2020 before it took a breather in May 2021 post making a high of 790. Since May 2021, the stock has been trading in a range-bound fashion. In fact, in August 2021 it made a low of 592. However, last week the stock gave a breakout on weekly charts. On lower time frames, the stock did witness a pullback and started consolidating. The immediate support for Prince Pipes is at 826 and resistance at 866 and 895 levels.  

The Relative Strength Index (RSI) is trading at 74 which presently is in the overbought zone, and above its 9-Day Exponential Moving Average (EMA). Moving Average Convergence Divergence (MACD) gave a positive crossover with respect to its signal line on the breakout candle and that too in the positive region. Bollinger band on the flipside is signalling a possible pullback as the price is currently trading above its upper band.  

At the time of writing, the stock was trading at the 849 level.