Technical Bits: Engineers India gives trendline breakout

The stock of Engineers India Limited has given downward sloping trendline breakout on Monday formed by connecting swing highs from December 24, 2019. The breakout was supported by justifiable volumes. Additionally, the stock formed a sizeable bullish candle on breakout day, which adds strength to the breakout.

The major trend of the stock is bullish as it is trading above its weekly pivot and above its long-term and short-term moving averages, i.e. 20-day, 50-day, 100-day and 200-day EMAs. The 14-period RSI on the daily chart is quoting at 70.32 and it is in the bullish zone, which suggests a good momentum going forward. The daily and weekly MACD stays bullish as it is trading above its zero line. The other volume-based indicators like OBV and Money Flow index are also very strong. Additionally, the trend strength is absolutely extremely high as the ADX is above 30.48 and -DI is much below the +DI and ADX. This shows the technical strength in the stock.

Going ahead, the stock has immediate support in the zone of Rs. 123-120 as the horizontal trendline support and long-term 200-day EMA is placed in that region, while the major support is placed in the zone of Rs. 115-113.50 as it is the confluence of long and short term 20-day EMA, 50-EMA and 100-day EMA. On the higher side, any sustainable move above the level of Rs. 130 is likely to open up gates for further rally towards the levels of Rs. 135, followed by Rs. 140.

On Monday, the stock of Engineers India closed at Rs. 127.65 per share, surged by 6.64 per cent. The stock opened at Rs. 120.80 per share and hit an intraday high of Rs. 128.60 and a low of Rs. 120.25 per share on BSE.