Technical Bits: Rites gives trendline breakout

The stock of Rites Limited has given downward sloping trendline breakout on the daily time frame, along with relatively higher volumes. Additionally, the stock had formed opening bullish Marubozu candle on breakout day, which adds strength to the breakout. The opening bullish Marubozu candle has no shadow extending from the open price end of the body. Opening bullish Marubozu candle indicates extreme bullishness.

The major trend of the stock is bullish as it is trading above its weekly pivot and above its long-short term moving averages, i.e. 20-day, 50-day, 100-day and 200-day EMAs and these moving averages are exactly in an ascending order, which suggests that the trend is strong. The leading indicator RSI is currently quoting at 72.29 and it is in a super bullish zone. The fast stochastic is also trading above its slow stochastic line. The other volume-based indicators like OBV and Money Flow index are also very strong. Moreover, the ADX is very strong at 37.40. The -DI is much below the +DI and ADX is above the -DI and +DI. This shows the technical strength in the stock. 

Going ahead, we expect the bias to remain positive as long as stock sustains above the Fridays low of Rs. 276.95 level. On the higher side, the level of Rs. 310, followed by Rs 321.60, would be seen as the next resistance zone for the stock.

On Friday, the stock of Rites closed at Rs. 293.25 per share, surged by 6.29 per cent. The stock opened at Rs. 276.95 per share and hit an intraday high of Rs. 297.90 and a low of Rs. 276.95 per share on NSE.