Chart Check: This cement player gave breakout above ‘falling wedge’ pattern; time to buy?

ACC, part of the cement industry, has fallen by over 16 per cent from its November 2021 highs but a breakout from a ‘falling wedge’ pattern on the weekly charts suggests that bulls might take control at least in the short term.
outperformed the benchmark index on a weekly and monthly basis and gave a breakout above the ‘falling wedge’ pattern which suggests further upside. Experts see a target of Rs 2,400 which was earlier proved to be a strong resistance level.

The stock with a market capitalisation of more than Rs 40,000 crore as on 1 July 2022, hit a 52-week high of Rs 2,587 on 15 November 2021. It closed at Rs 2,167 on 1 July 2022.

ACC on the daily chart made a bottom around Rs 1,900 levels back in March 2022 and then bounced back sharply but failed to clear resistance placed around Rs 2,400.

The stock is still trading below the crucial 50, and 200-DMA on the daily charts which suggests that the long-term trend remains bearish. But a close above Rs 2,185 or 50-DMA could add momentum to the bulls.

On the weekly charts as well, the stock is trading below the 50-WMA, but above the 200-WMA. The stock rose over 3 per cent in a week and fell just a little over 1 per cent in a month compared to over 4 per cent fall seen in the Nifty in the same period.

ACC recorded a breakout from the ‘falling wedge’ pattern on the weekly time frame which is a bullish sign. Wedges are triangle patterns that are pointing upward or downward. A triangle pattern that points downwards, i.e. a falling wedge, is called a bullish wedge.
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“On the weekly charts, we can spot that prices have shown a bounce back from the level of 38.2 per cent retracement of prices prior advance, Rs 895 level (March 2020) till Rs 2,589 (November 2021). We can also observe change in the polarity by the prices around Rs 1,900 levels,” Vidnyan Sawant, AVP – Technical Research, GEPL Capital, said.

“Prices have given an upward breakout from the ‘falling wedge’ pattern on the weekly time frame. We witnessed strong participation in volumes in every rise of the stock indicating strength in the positive move,” he said.

The RSI indicator on the weekly has formed a higher low, indicating bullish momentum.

“Based on the price action and technical parameters we expect the stock to move higher towards Rs 2,400 levels. The level of Rs 2,050 would act as major support for the counter on the downside,” recommends Sawant.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)