Chart Check: Tube Investment breaks out from a cup pattern; fresh record highs likely to continue in July

Short-term traders can look to buy the stock now or on marginal dips towards the neckline of the Cup pattern formed above Rs 3,000 level, they say.

The stock rose from Rs 2,781 as on 26th May 2023 to Rs 3,147 as on 28th June 2023 which translates into an upside of over 13% in a month.

The stock hit a record high of Rs 3,394 on 23rd June 2023, but it failed to hold on to the momentum. However, it is still trading above the neckline of the cup pattern which took around 6 months to get completed.

The auto component stock bounced back after taking support above the 50-WMA in February 2023. The stock is trading above most of the crucial short- and long-term moving averages on the daily charts as well.

The daily Relative Strength Index (RSI) is placed at 67.5. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.

ET CONTRIBUTORS

“Tube Investment stock has given a breakout of the cup pattern formed over a period of 6 months. The volumes have been rising from the past couple of weeks where during the breakout these were the highest in the past 8 weeks,” Aditya Thukral, Senior Analyst at Master Capital Services, said.

The ticker is in a very strong uptrend with the formations of higher highs and higher lows on the short-term as well as long-term charts.

Previous resistances have continued to provide support for any correction in the stock, following the principle of polarity.

“Ideally, trend continuation should happen in the stock prices where longs should have a stop loss below Rs 2,780 on a closing basis which is the higher low of the current rally,” highlighted Thukral.

The stock is well placed above all the major exponential moving averages viz. 50-day, 100-day, and 200-day.

“The cup pattern formed on charts suggests a target of Rs 3,700 level on the stock which can take up to 2 months to achieve. The increase in volatility is in favor of a larger trend after a consolidation phase of 6 months provides a long opportunity in the stock,” recommends Thukral.

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