ABFRL chart portrays positive picture

Considering the daily chart, the stock of Aditya Birla Fashion & Retail Limited has bounced back from the edge of the rising trendline support (logarithmic scale), which is formed by connecting swing lows from May 2020. The reversal from the trendline support is further justified by the above 50-day average volume. In addition to this, the stock has also formed a sizeable bullish candle on the daily chart for two consecutive trading sessions.   

On Friday, the stock surged above its short-term moving averages, i.e. 20-day EMA and 50-day EMA level. Further, the 20-day EMA is in a rising trajectory, which indicates that the bulls are taking control near the long-term support zone.   

From the momentum indicators’ perspective, the 14-period daily RSI is currently quoting at 54.53 and it is trading above its 9-day average. The stochastic has also given a positive crossover. Both the indicators are supporting the overall price structure.   

Interestingly, in the recent correction, the stock has witnessed a hidden positive divergence between the daily RSI and stock price, which is a sign of trend continuation. The hidden positive divergence occurs when the price is making a higher low, but the indicators are showing a lower low.  

Going ahead, the stock has strong support in the zone of Rs 150-Rs 148, while on the higher side, immediate resistance is placed at Rs 171.65, followed by Rs 177.10 level.    

On Friday, the stock of Aditya Birla Fashion & Retail Ltd closed at Rs 166.75 per share, surged by 4.97 per cent. The stock opened at Rs 158.85 per share and hit an intraday high of Rs 169.90 and a low of Rs 158 per share on NSE.