Massive Breakout: Stock Skyrockets by 13%, Volume Jumps 2,300%!

  • Stock Market Analysis

Despite a weak session on Monday, the share price of Procter & Gamble Health Ltd (NS: PROR ) rallied 12.56% to INR 4,617.85, retracing from the day’s high of INR 4,741.4, by 12:15 PM IST. The mind-boggling jump in the stock is clearly denoting the level of enthusiasm among market participants in today’s session as the bidding war takes the stock to the highest level since February last year. 

This INR 6,809 crores big pharmaceutical firm is catching all the attention in the pharma space with its significant outperformance as compared to a 0.32% intraday return of the Nifty Pharma index. Surprisingly, there has been no official statement by the company to the exchanges that could justify today’s price and volume spurt.

Image Description: Weekly chart of Procter & Gamble Health Limited with volume bars at the bottom

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The stock took a severe beating 2 years back, falling one way from a high of INR 7,500, marked in February 2021. Although the fall abated to a good extent in the last one year, there weren’t any signs of a reversal, till now. The mild downtrend during which the stock kept on making lower highs as the selling pressure from the top persisted, formed a falling trendline resistance which is finally broken today.

This trendline breakout is a good reversal indicator and is now giving relief to investors, amid a long downtrend. The volume on today’s breakout is no less than impressive. As of writing, the NSE clocked a volume of over 102K shares, which is 2,387% higher than the 10-day average volume of 4.1K shares. Now that’s something! In technical parlance, the higher the volume backing a breakout is, the more reliable the breakout becomes. 

Some of you might think, that the rally has been missed but looking at the bigger picture (on a weekly chart) the focus should be on the final reversal. The current move could continue to the psychological level of INR 5,000 in the near future with ease. Although, there is a full week left to analyze a stock’s weekly chart, still, the longer time frame is looking quite lucrative.

To make the risk-to-reward ratio more favorable, traders should wait for a retracement, at least till INR 4,425 which is roughly around 50% of today’s rally. From a long-term perspective, it seems the right time to add it to a pharma portfolio. 

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  • JP Singh @JP Singh
    calling it BO because it's already happened and easy to see in chart, the train already left the station and we could not board. 2 candles before could anyone predict that 3rd candle would be this!? Sea earlier bigger green candles in same chart and volume also, what happened then??
    Like 0
  • namami ghosh @namami ghosh
    Like 1

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