‘Range Breakout’ with 7% Rally & 600% Volume Spike!

  • Stock Market Analysis

Today’s session is witnessing selling pressure which was somewhat expected as the markets have already rallied too much in a relatively short span of time. The Nifty 50 index is down 0.76% to 18,805, by 11:31 AM IST, however, it should not be considered a downtrend yet, just a running correction.

Again focusing on the long opportunities, MTAR Technologies Ltd (NS: MTAR ) is making noise on the street with its range breakout. The company is a smallcap manufacturer of mission-critical precision and heavy equipment, components and machines and serves sectors such as defense, aerospace, etc.

Image Description: Daily chart of MTAR Technologies with volume bars at the bottom

Image Source: Investing.com

Despite a weaker market, the share price of MTAR Technologies is gaining attention, all thanks to a massive intraday rally of 7% to INR 1,712.55. The stock has not just surged to the highest level since mid-September 2022, but also delivered a range breakout on the daily charts.

For over three months, the stock didn’t go anywhere. It only traded in a range as support from the lower levels and selling from the upper levels kept it in a sideways trend. The support of the range is around INR 1,520, while the resistance is around INR 1,700. Although there have been quite a few intraday spikes above this resistance in the past, the stock had never been able to close above it.

This time it seems like the breakout is almost confirmed as the volume expansion backing today’s move is impressive. As of the writing, there have been a total of 548.7K shares that have exchanged hands so far, which is sufficiently higher by 600% from the 10-day average volume of 78.3K shares (recorded yesterday). The volume spike is clearly showing the increasing interest of market participants to get their hands on MTAR Technologies shares.

Once the resistance of INR 1,700 is crossed on a closing basis today, then the breakout would also be confirmed on the weekly chart, as it’s Friday. As per the height of the range, the stock could easily move by the distance of around INR 180 from the resistance which theoretically gives an estimated target of around INR 1,880.

If the stock falls back below the resistance before the closing, even then the trend would not become bearish, and a further attempt to cross this resistance in the next week should be carefully watched. The trend should only be deemed negative once the stock breaks the 3-month-long support of INR 1,520.

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  • Shyam singh @Shyam singh
    nice observation
    Like 0
  • Ravi Chandran @Ravi Chandran
    Good observations
    Like 0
  • Sumesh Soman @Sumesh Soman
    just surprised by seeing the delivery data .. it's just 23% out of the total volume traded .. might be a fake break out ..i guess .. what's ur thought on it ..??
    Like 2
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Hi Sumesh, I generally don't look at the delivery volume.
      Like 0
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  • Majeedhajwane Hajwane @Majeedhajwane Hajwane
    nice
    Like 1
  • Kaustubh Korde @Kaustubh Korde
    Aayush Khanna..you are doing such a great job!
    Like 3
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Thank you Kaustubh :)
      Like 0
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  • amar paul @amar paul
    thus continue
    Like 1
  • Sourya Suvankar @Sourya Suvankar
    Advise on Nifty 50 for Monday, please
    Like 0
  • namami ghosh @namami ghosh
    a toast for Guruji from a grateful reader... cheers!
    Like 0
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Cheers!
      Like 1
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