Finolex Cables registers a trendline breakout! Time to buy?
FINCABLES soared over 7% on July 29.
The stock of Finolex Cables jumped over 7% during the initial hours of Friday’s trading session. With this, it has registered a falling trendline breakout which is accompanied by huge volumes. The volume is greater than the 10-day, 30-day and 50-day average volume, justifying the strong demand for the shares. It has also crossed above its strong term resistance level of Rs 420. After correcting over 40% from its 52-week high of Rs 607, it has seen strong buying interest at lower levels and has jumped about 25% from its recent swing low of Rs 346.
Currently, the technical parameters show strong strength in the stock. The 14-period daily RSI (66.46) has jumped into bullish territory after the strong breakout. The MACD has indicated a bullish crossover, while the OBV is at its peak which is a positive sign. The +DMI is well above the -DMI and demonstrates a good uptrend. The Elder Impulse system has formed a bullish bar, which indicates a fresh buying momentum.
Moreover, the Relative Strength (RS) is in the positive region, suggesting an outperformance of the stock against the broader market. The stock is currently above its 20-DMA, 50-DMA, and 100-DMA. Overall, the stock is technically stock and has the potential to test higher levels in times to come.
As per the breakout and price action, we can expect the stock to be testing its 200-DMA level of Rs 448 in the near term, followed by Rs 480 in medium term. It provides a good opportunity for swing traders who are searching for good momentum. Keep an eye on this stock to track its further development.
Finolex Cables Limited is engaged in the manufacturing of electrical and telecom cables. With a market capitalisation of about Rs 6100 crore, it is one of the strong growing companies in its sector.
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