As the market is trading higher for the day, owing to global market strength, many stocks are recovering from their lows, and some are heading for a fresh breakout. The stock that is catching investors’ attention in today’s session on a full scale is a lesser-known diagnostics chain Vijaya Diagnostic Centre Ltd (NS: VIJA ) which has a market capitalization of INR 4,527 crores.
The share price of Vijaya Diagnostic surged over 9.4% to the day’s high of INR 485.45 and is currently trading a bit lower at INR 470, by 2:40 PM IST. The rally alone is not just the center of attraction for investors but the levels at which the stock has been trading on the daily chart.
Image Description: Daily chart of Vijaya Diagnostic Centre with volume bars at the bottom
Image Source: Investing.com
The stock had been taking quite a strong resistance for a long time, at around INR 475 - INR 480. This is a very robust supply zone for the stock and every time it came close to this zone, a wave of selling came in to turn the stock lower from there. It seems like bears have been aggressively selling at these levels and therefore for more than 6 months, the stock could not surpass this level decisively. I would call it a make-or-break level.
Even today, as the stock soared to over INR 485.45 on an intraday basis, the selling from highs abated the rise and the stock fell below this resistance zone. But it seems like, this time bulls might surprise the bears as the rally above the resistance zone with a closing could potentially materialize soon.
Why it looks so? Well, as of now, the stock is looking to close at the highest level since mid-May 2022 which itself is quite a bullish signal. Although the volume is now as high as I would have preferred, the above-average volume is at least not bad.
As long as the stock is trading above the support level of INR 395, the chances of breaking above the resistance of INR 480 are decent. Patiently waiting for the closing above the resistance is the ideal way to go. As this is a strong supply zone, if the stock clears it then a lot of weak hands might get out which would pave the way for the stock to stage a good rally from there.
On the upside, above the resistance of INR 480, the stock could travel to the next hurdle of INR 535 - INR 540. A level of INR 395 remains strong support.
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sir what about tata Steel, please adviceLike 1