Tata Coffee gives trendline breakout

Considering the daily timeframe, the stock of Tata Coffee Limited has given a downward sloping trendline breakout, formed by connecting swing highs from September 2020. With this trendline breakout, the stock has also managed to close above its upper Bollinger band level, which is a very bullish sign.   

Further, this breakout is confirmed by a robust volume of nearly seven times the 50-day average volume, indicating a strong buying interest by the market participants. The 50-day average volume was 11.32 lakh, while on Tuesday, the stock had witnessed a total volume of 74.35 lakh.   

Currently, the stock is trading above its short and long-term moving averages, i.e. 20-day, 50-day, 100-day & 200-day EMAs, and these moving averages are exactly in an ascending order, which suggests that the trend is strong.  

Talking about the indicators, the 14-period daily RSI is currently quoting at 66.21 and it is in a rising mode. The stochastic oscillator has also given a positive crossover. The daily MADC stays bullish as it is trading above its zero line and signal line. The histogram is suggesting a pickup in the upside momentum.   

Going ahead, we expect the bias to remain positive as long as the stock sustains above the zone of Rs 106-Rs 105 levels. On the higher side, the zone of Rs 119-Rs 120 would be seen as the next resistance zone for the stock.      

On Tuesday, the stock of Tata Coffee Limited surged by 6.55 per cent and closed at Rs 113.95 per share. The stock opened at Rs 107.40 per share and hit an intraday high of Rs 116.60 and a low of Rs 107 per share on NSE.