UPL Limited features as Bollinger Band Squeeze pick

UPL Limited gets picked up by our Bollinger Band Squeeze scanner, suggesting that a consolidation breakout is expected in the near-term. 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 formed Bullish Engulfing candle on October 26, 2018 thereafter the stock surged sharply and registered a high of Rs. 794.30. Since then, the stock is trading in contracting consolidation. As of now, the momentum in price has narrowed substantially and the stock is likely to give a breakout in the coming days.

The indicators and oscillators are too poor to comment on, however, the Average Directional Index (ADX) is continuously rising since January 10, 2019, which suggests the stock is likely to give directional momentum in the near-term.

In the coming days, the 50-day EMA is likely to act as support, which is currently placed at Rs. 751.40. While on the upside, the zone of Rs. 790-800 will be the crucial resistance for stock. A follow-through move above this level would lead to an extension of the pull-back toward Rs. 830, followed by Rs. 850.