Stock to watch: Indraprastha Gas Limited

Indraprastha Gas Limited (IGL) is a city gas distribution company and is also engaged in the sale of natural gas.

The stock of IGL is on cloud nine on Friday as the stock has soared over 7% and it is seen trading near its day’s high. The stock on the daily chart has formed an opening bullish Marubozu candle as the candle has no lower shadow as the open and low are identical. The opening bullish Marubozu candle indicates an extreme bullishness as after opening, the price starts to trend higher, forming a long body without a lower shadow. Furthermore, we are just halfway through Friday’s trading session, the stock has already surpassed its prior trading session volume and recorded a volume of over 35 lakh shares.

With this strong up-move on Friday, the stock has managed to move above its 20-DMA for the first time since April 24, 2022. The IGL May future has seen an open interest addition of nearly 1.26% and the future is trading with a premium of Rs 1 to its cash price on NSE exchange.

The MACD is about to give a buy signal and the 14-period daily RSI is out of the squeeze and it has marked a fresh 14-period high, which is positive for the stock. The directional indicator is at an influx point.

The stock on a WTD basis is up by 6.4%, while on a MTD basis it is up by 5.35% and on YTD basis it is down by over 20%. Technically, IGL has major resistance placed in the region of Rs 382 and thereafter, the resistance is seen around Rs 400.

Hence, sustaining above the level of Rs 382 is crucial for the stock. Meanwhile, on the downside, it has support around the level of Rs 339-340 zone.