This stock which has gained over 350% meets Mark Minervini’s Trend template.
The stock of Lakshmi Machine Works Ltd has formed a Hammer like pattern in the last week of March 2020 and thereafter marked the sequence of higher tops and higher bottoms. From the low of Rs 2000, the stock has gained 351.64%.
On Friday, the stock has given a breakout of cup pattern breakout. The depth of the cup pattern is 17% and its length is 10-weeks. Further, this breakout was supported by a robust volume of nearly double of 50-weeks average volume, indicating strong buying interest by market participants.
In addition, the stock has formed an opening bullish Marubozu candle on breakout week, which adds strength to the breakout. The opening bullish Marubozu candle has no shadow extending from the open price end of the body. Opening bullish Marubozu candle indicates extreme bullishness.
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 299 trading sessions, the stock is trading above its 200-day moving average.
The 50-day (10-week) moving average is also above both 150-day and 200-day moving averages. The current stock price is above the 50-day moving average. Also, the current stock price is nearly 138% above its 52-week low and currently, it is trading at all time high. In the last couple of weeks, the stock has outperformed the frontline indices. Also, it has relatively outshined the Nifty 500 with a decent margin. The relative strength comparison with Nifty 50 and Nifty 500 is marking the higher high.
One interesting observation on the leading indicator RSI is that during the formation of the cup pattern, the RSI has never sustained below the 60 mark. It has taken support in the zone of 59-60 level and bounced back. As per the RSI range shift rules if RSI bounced level of 60 then it has resulted in a range shift of RSI. The trend strength is very strong as weekly ADX is at 49.51, and it is above the +DMI & -DMI.
Talking purely about the trading levels, the 20-day EMA will act as strong support for the stock. According to the measure rule of cup pattern, the first target is placed at Rs 10400 level.
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