Zensar Technologies gives pennant breakout

The stock of Zensar Technologies Limited has formed a hammer candlestick pattern as on the weekend of March 27, 2020, and thereafter, marked the sequence of higher tops & higher bottoms. The stock gained more than 308 per cent from its 52-week lows and has also given over 49 per cent returns from year-to-date.

After registering a high of Rs 237.45, the stock has witnessed a minor correction and formed a pennant pattern. During the formation of the pennant pattern, mostly, the volume activity was below the 50-day average. 

Today, the stock gave a breakout of the pennant pattern, which suggests a further bullish momentum. This breakout is confirmed by a robust volume. Additionally, the stock has formed a sizeable bullish candle on the breakout day. The pennant is a short-term trend continuation pattern, which has conical bodies and is formed during a period of consolidation. The breakout above the downward sloping trendline signals that the previous uptrend has resumed.

As the stock is trading at its 52-week high level, all the moving averages-based trade set-ups are showing a further bullish momentum in the stock.

Talking about the indicators, the 14-period daily RSI is in a bullish trajectory. The stochastic oscillator is also suggesting a bullish momentum as the fast stochastic is trading above its slow stochastic line. The trend strength is extremely high as the ADX is above 45 and -DI is much below the +DI and ADX.

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, the zone of Rs 230-Rs 223.80 is likely to act as immediate support for the stock.

On Wednesday, the stock of Zensar Technologies surged by 12.55 per cent and closed at Rs 260.45 per share. It had opened at Rs 232.95 per share & hit an intraday high of Rs 263 and a low of Rs 230.60 per share on NSE.