PSP Projects meets the trend template of Mark Minervini
The stock of PSP Projects Limited has formed a Hammer 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 232, the stock has gained 148% in 96 weeks.
In the current week, the stock has given a breakout of downward sloping trendline resistance formed by connecting swing highs from April 2018. Further, this breakout was supported by a robust volume of nearly 7 times of 50-weeks average volume, indicating strong buying interest by market participants. The 50-weeks average volume was 10.82 lakh while in the current week the stock has registered a total volume of 74.77 lakh.
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 25 trading sessions, the stock is trading above its 200-day moving average. Currently, it is trading above its 200-day SMA by 24.47%.
The 50-day (10-week) moving average is also above both, the 150-day as well as 200-day moving averages. The current stock price is above the 50-day moving average. Also, the current price is 45% above its 52-week low and currently, it is trading 8% below its all-time high.
Since the last couple of trading sessions, 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.
As the stock is trading near its all-time high, all the trend indicators are showing that the uptrend continues. The stock's Relative Strength Index (RSI) has reached its highest value in the last 14-weeks, which is a bullish sign. Also, it has managed to surge above the 60 mark. Moreover, Martin Pring’s long-term KST set-up has also given a buy signal.
The stock is clearly on an uptrend and trend strength is extremely high. The Average Directional Index (ADX), which shows trend strength, is as high as 25.02 on a daily chart and 25.22 on a weekly chart. Generally, above 25 levels are considered as the strong trend. In both time frames, the stock is meeting the criteria.
Considering the robust technical structure of the stock we believe it is likely to continue its northward journey. On the downside, the 13-day EMA is likely to provide the cushion in case of any immediate decline. The 13-day EMA is currently placed at Rs 523.30 level.
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