KPIT, Bollinger Band Squeeze pick

The Bollinger Band Squeeze occurs when volatility falls to low levels and the Bollinger Bands narrow. A volatility contraction or narrowing of the bands can foreshadow a significant advance or decline.

The stock of KPIT, after registering 52-week high, has witnessed fierce sell-off and the sell-off halted near its 61.7 per cent retracement level of its upmove beginning from August 2017 to September, 2018. The stock has been trading in narrow contracting trading range since early October. This stock recently occurred in our Bollinger band squeeze scanner which suggests that consolidation breakout is near.

All indicators and oscillators are also in consolidation. The 14-period of RSI is quoting at 41.74, while it is not able to cross 60 mark from early September.

A consolidation breakout or breakdown below some important support/resistance level with supportive volumes will lead to the major advance or decline. For the short term, a close above Rs 222 or close below Rs 190 will lead to a major momentum in the stock.