This telecom stock has seen some classical technical patterns playing out very well on the charts. BHARTIARTL marked a classical double top resistance near 780 levels between November 2021 and April 2022 that spanned over five months. The most recent price action shows the price trying to chart a potential breakout with multiple pieces of evidence supporting this attempt.
ChartTalk – This Is Free!!
Our FREE technical newsletter – Get actionable and profit-generating trade ideas TWICE in a month in your mailbox.
After forming a double top resistance near 780, BHARTIARTL slipped under corrective decline; this took the price near 640 over the next couple of weeks. The levels of 635-640 have acted as a strong support area for the stock multiple times as evident from the chart. The price tested this pattern support a couple of times in the recent past only to bounce back from those levels.
The most recent price action on the chart has seen the price in a narrow trading range between 640-695 levels. The price has tried to break above this pattern resistance zone by penetrating the upper trend line. As of today, the stock has closed a notch above its 200-DMA which stands at 703.07.
The RSI is also seen breaking out of a pattern formation much ahead of the price breakout which is bullish. The indicator has also marked a new 14-period high which is bullish; however, it is neutral and does not show any divergence against the price.
Over the last several months while the prices declined, OBV (On-Balance Volume) stayed sideways and did not decline with the price. This means lesser volume participation during the corrective phase of the stock.
Over the past few days, while the stock makes an attempt to stage a breakout, the volumes have remained stable around their 25-day average. The stock remains in the improving quadrant of the RRG.
There are high possibilities of the stock inching higher and confirming a breakout from the trading zone that it has formed. If the prices move on the expected lines, the possibilities of the stock testing 725 and 740 levels cannot be ruled out. Any close below 675 will fail this attempt and the projected move.
Foram Chheda, CMT