Technical Bits: Nerolac gives trendline breakout

The stock of Kansai Nerolac Paints has given downward sloping trendline breakout formed by connecting swing highs from January 2018. The breakout was supported by strong volumes. Additionally, the stock formed a sizeable bullish candle on breakout week, which adds strength to the breakout.

The major trend of the stock is bullish as it is trading above its weekly pivot and above its long-short term moving averages, i.e. 20-week, 50-week, 100-week and 200-week EMAs. The leading indicator 14-period weekly RSI is currently quoting at 58.43 and it has recently given downward sloping trendline breakout. The daily and weekly MACD stays bullish as it is trading above its zero line. The fast stochastic is also trading above its slow stochastic line.

Going ahead, the stock has immediate support in the zone of Rs. 448-443 as the 50-week EMA and 100-week EMA is placed in that region, while the major support is placed in the zone of Rs. 400-398 as it is the confluence of 200-day EMA and the upward sloping trendline support. On the higher side, any sustainable move above the level of Rs. 482 is likely to open up gates for further rally towards the levels of Rs. 500, followed by Rs. 520.

On Friday, the stock of Kansai Nerolac Paints closed at Rs. 474.55 per share, surged by 1.15 per cent. The stock opened at Rs. 471.60 per share and hit an intraday high of Rs. 480.85 and a low of Rs. 471.60 per share on NSE.