Chart Check: Breach of falling trendline resistance and breakout from Cup & Handle pattern make PNB Housing an attractive buy

economictimes.indiatimes.com:

PNB Housing Finance, part of the housing finance segment, have rallied more than 30% in the last three months which has helped the stock to close above the descending trendline resistance on monthly charts and stage a breakout from Cup and Handle pattern on the weekly charts. The breakout on both monthly and weekly charts has opened room for the stock to head towards 800-900 levels in the next 3-6 months, which would take the stock to a fresh 52-week high, suggest experts. The housing finance stock rose from Rs 458 hit on 6 April 2023, to Rs 620 recorded on 7 August 2023, which translates into an upside of 37% in the last 3 months.

PNB Housing Finance stock with a market capitalization of more than Rs 16000 crore trades at a P/E multiple of 13.97x and an earnings per share (EPS) of 45.11, BSE data showed. The stock gave a breakout from a falling trendline resistance on the monthly charts which is a positive sign for the bulls. “PNB Housing Finance stock has broken through the descending resistance trendline to the upside on the monthly chart with higher-than-normal volumes,” Suraj Bathija, Founder & CSO at AlgoBulls, said.

“Out of 13 months, 12 were closed with a new closing price since June 2022, with only one month where stock closed in the negative. RSI is higher than level 60,” he said. In terms of price action, the stock is trading above 5,10,30,50 100, and 200-DMA on the daily charts but below the 20-DMA.

The RSI is higher than 60 levels on the weekly chart. In addition to the stock trading above the 26 SMA, the SMA is also moving higher. “The stock has demonstrated a bullish breakout from Cup and Handle chart pattern on strong volumes on weekly charts.