Asahi India gives pennant breakout

The stock of Asahi India Glass Limited (AIS) has given pennant pattern breakout on the daily time frame. Additionally, the stock formed a sizeable bullish candle on the breakout day, which adds further strength to the breakout.

The pennant is a short-term trend continuation pattern and it has conical bodies that are formed during a period of consolidation. Price consistently reaches higher lows and lower highs, creating two converging trendlines that form this conical shape. The breakout above downward sloping trendline signals that the previous uptrend has resumed.

The stock is trading above its long and short-term moving averages. Among the momentum indicators, the 14-period daily RSI is currently quoting at 68.20 and it is in super bullish zone. The daily stochastic oscillator is also suggesting some bullish momentum as per cent K is above the per cent D. The ADX is very strong at 44.03. The -DI is much below +DI and ADX is above -DI and +DI. This shows a technical strength in the stock. 

In the coming session, we expect the bias to remain positive as long as the stock sustains above Rs 238 mark. On the higher side, the level of Rs 264, followed by Rs 280, would be seen as the next resistance zone for the stock.

On Monday, the stock of Asahi India Glass closed at Rs 262 per share, surged by 5.82 per cent. The stock opened at Rs 253.15 per share and hit an intraday high of Rs 262.15 and a low of Rs 250.45 per share on BSE.