Technical Bits: UBL displays ascending triangle pattern breakout

A triangle forms when the price action narrows over several price swings. The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. On Monday, the United Breweries Limited has given a breakout of ascending triangle pattern. The breakout was supported by volume spurts. 

However, the 14-period RSI is quoting around 74.89, which suggests a overbought situation for the stock. According to Stochastic analysis, on the daily time frame, there is a bullish crossover, which is a positive signal. Meanwhile, the stock is trading above its major 50-day, 100-day and 200-day EMA levels.

For any immediate decline, the zone of Rs. 1,390-Rs. 1,380 is likely to act as strong support zone as it is the confluence of short-term 21-day exponential moving average and downward sloping trendline. While on the upside, the stock is likely to face resistance near Rs. 1,550-Rs. 1,560.

On Monday, the stock of United Breweries Limited closed at Rs. 1,483.25 per share, up by 4.95 per cent. The stock opened at Rs. 1,429 per share and hit an intraday high of Rs. 1,493.75 and a low of Rs. 1,411.40 per share on BSE.