Chart Check: After over 100% rally from Aug 2022 lows, IDFC breaks out from Pennant formation; time to buy?

economictimes.indiatimes.com:

IDFC, part of the financial services industry, has more than doubled in the last 1 year from its 52-week low and has broken out from a Pennant formation on the daily charts which has opened room for the stock to hit fresh record highs. The stock witnessed a strong bounce back after hitting a 52-week low of Rs 56.85 on 2nd August 2022. The stock closed at Rs 120 on 1st August 2023 which translates into an upside of 111% in the same period.

A Pennant is similar to a symmetrical triangle. It is generally formed in 10-15 days compared to 1-3 months taken by a symmetrical triangle. Also Read The stock touched a record high of Rs 121.20 on 1st August 2023, but it faced a marginal selloff at higher levels.

However, as long as the stock is holding on to 111 then there is a chance for bulls to take over, suggest experts. Short-term traders can look to buy the stock on dips for a possible near-term target of Rs 125, they say. The stock has rallied more than 17% in a month and over 30% in the last 3 months.

The recent momentum pushed the stock in an overbought zone; hence, some consolidation cannot be ruled out. The daily Relative Strength Index (RSI) is placed at 69.5. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed.

MACD is above its center and signal line, this is a bullish indicator. In terms of price action, the stock is trading below 5-DMA but above 10,30,50,100, and 200-DMA on the daily charts. IDFC stock price is in an overall uptrend and forming higher highs – higher lows from the past four months with a strong bullish candle.