Praj Industries meets the trend template of Mark Minervini
The stock of Praj Industries Limited has formed a Spinning Top candlestick pattern in the last week of March 2020 and thereafter marked the sequence of higher tops and higher bottoms. From the low of Rs 43, the stock has witnessed an 846% upside in just 63 weeks.
After registering the high of Rs 407, the stock has witnessed a throwback. During this throwback phase, the volume was mostly below the 50-week average volume, which suggests its routine decline after a robust move. The throwback is halted near the 38.2% Fibonacci retracement level of its prior upward move. During this throwback phase, the stock has formed a symmetrical triangle pattern on the weekly chart.
In the current week, the stock has given a breakout of symmetrical triangle pattern on the weekly chart. This breakout was confirmed by above 50-weeks average volume. Also, the stock has formed a strong bullish candle on the weekly chart.
Currently, the stock is meeting the criteria of Mark Minervini's trend template. The current market price of the stock is above the 150-day (30-week) and the 200-day (40-week) moving averages. The 150-day moving average is above the 200-day moving average. Since the last 13 trading sessions, the stock is trading above its 200-day moving average.
The current stock price is above the 50-day moving average. As of now, it is trading at Rs 265 per cent which is above its 52-week low and is nearing its all-time high. Since the last two weeks, the stock has outperformed the frontline indices. Also, it has relatively outshined Nifty 500 with a decent margin. The relative strength comparison with Nifty 50 and Nifty 500 is marking a higher high.
On all the major timeframes, the leading indicator i.e. the 14-period RSI is in bullish territory. Most importantly, on the weekly chart, the RSI has given downward sloping trendline resistance, which is a bullish sign. The fast stochastic is also trading above its slow stochastic line. Recently, the MACD line just crossed the signal line, and the histogram became green on the weekly chart. Moreover, the daily ADX (30.64) shows solid trend strength.
Going ahead, as per the measure rules of the symmetrical triangle, the upside target is placed at Rs 465, followed by Rs 494 level in the near term. On the downside, the recent swing low of Rs 362 will act as immediate support for the stock.
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