Technical Bits: Muthoot Finance gives trendline breakout

The stock of Muthoot Finance has given downward sloping trendline breakout formed by connecting swing highs from June 2019. The breakout was supported by relatively higher volumes.

Currently, the stock is trading above its 20-day EMA (619), 50- day EMA (616.30), 100- day EMA (600.70) and 200- day EMA (562), which indicates a medium-long term uptrend. The 14-period RSI on the daily chart is currently quoting at 63.31 and it is in the rising trajectory, which suggests bullish bias. The MACD is trading above the zero line for the past five trading sessions. The histogram is suggesting that the momentum is picking up. Moreover, the ADX and +DI is above the -DI, which indicates positive strength in the stock.

Going ahead, the stock has immediate support in the zone of Rs. 620-616 as the 20-day EMA and 50-day EMA is placed in that region, while the major support is placed in the zone of Rs. 595-590 as it is the confluence of 100-day EMA and the upward sloping trendline support. On the higher side, any sustainable move above the level of Rs. 660 is likely to open up gates for further rally towards the levels of Rs. 690, followed by Rs. 720.

On Friday, the stock of Muthoot Finance closed at Rs. 648.25 per share, surged by 2.03 per cent. The stock opened at Rs. 639 per share and hit an intraday high of Rs. 655.50 and a low of Rs. 637.75 per share on NSE.