UltraTech Cement gives channel breakout

From the low of Rs 2,910, which was registered on March 25, 2020, the stock of UltraTech Cement Limited has maintained its rhythm of higher highs & higher lows. The stock gained more than 84 per cent from its 52-week low and has given over 32 per cent returns from year-to-date. 

Since the last 14 trading sessions, the stock was trading in a downward sloping channel. However, on Wednesday, the stock gave a breakout of the upper trendline of the downward sloping channel. This breakout was supported by a robust volume. Along with this channel breakout, the ADX, which shows the strength of the trend, turned upside and moved above the -DI. Additionally, the stock has formed a sizeable bullish candle on the breakout day, which adds further strength to the breakout. 

Majorly, the stock is displaying a bullish trend as it is trading above its weekly pivot and short & long-term moving averages, that is, 20-day EMA, 50-day EMA, 100-day EMA, and 200-day EMA. These moving averages are exactly in an ascending order, which suggests that the trend is strong.  

Talking about the indicators, the stock's relative strength index (RSI) has reached its highest value in the last 14 days, which is bullish. Also, it has managed to close above the prior swing high. The fast stochastic is trading above its slow stochastic line.  

Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias. On the downside, important support for the stock is placed at the zone of Rs 5,120-Rs 5,080 while on the upside, immediate resistance is seen at Rs 5,445, followed by Rs 5,561.  

On Wednesday, the stock of UltraTech Cement closed at Rs 5,354.75 per share, surged by 4.04 per cent. The stock opened at Rs 5,157.05 per share and hit an intraday high of Rs 5,400 and a low of Rs 5,120.05 per share on NSE.