This stock jumps over 10 per cent making a long-term trend reversal pattern

Despite the fact that Nifty 50 is trading flat with a bearish bias, this stock is up more than 10 per cent today. On weekly charts, it formed a long-term trend reversal pattern. Continue reading to learn more about this stock.

Despite the fact that Nifty 50 is trading flat with a bearish bias, this stock is attracting everyone's attention on Dalal Street. Amara Raja Batteries Ltd. is a well-known battery manufacturer in India with a market capitalisation of Rs 8,768 crore. It just released its Q2 FY23 results, which startled the market.

Revenue from operations increased 19 per cent year on year to Rs 2,699 crore, while Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) was Rs 360 crore. This company, which has a current dividend yield of 0.88 per cent, recently declared an interim dividend of Rs 2.9 per share. Its Q2 FY23 earnings evidently pleased investors, as seen by the company's share price.

Since investors were eager to purchase Amara Raja shares at any price they could get, the stock increased nearly 14 per cent to Rs 578 in the opening session. However, today's price increase is significant for long-term investors.

Image: Weekly chart of Amara Raja Batteries Ltd.

This stock has broken through its long-term declining trendline resistance at Rs 550 on the weekly chart. This indicates that the stock's downturn is coming to an end, following a 57 per cent drop since January 2021. A weekly chart breakout is more significant than a breakout on a lower time frame.

Today, when the stock increased by more than 10 per cent, the chart structure shifted from lower highs and lower lows to higher highs and higher lows. According to Dow theory, this is the core of an uptrend. So, after a continuous decline for roughly 1.5 years, the stock has produced an uptrend signal that should not be disregarded.

So far, the weekly volume for the day has risen to 1.07 crore shares, the biggest weekly volume since September 2021. With a protracted trend reversal indication, such big volume support exists.

However, the breakout would be verified on the weekly chart at the close of today's trading session. This stock may not have short-term momentum, but the present trend on the charts suggests a very significant reversal. However, this is not in any way a guarantee that the stock will not fall from its present levels. As a result, it makes perfect sense to wait for the stock to finish the formation by the end of the day.