Chart Check: Breakout from Descending Triangle pattern makes D-Mart an attractive buy; likely to hit fresh 52-week highs
Avenue Supermarts Ltd (D-Mart), part of the diversified retail industry, has given a breakout from a Descending Triangle pattern on the weekly charts and has opened room for the stock to head towards 4000 levels.
Short to medium-term traders can look to buy the stock now for a possible target of Rs 4500-4600 in the medium term, suggest experts.
The stock hit a 52-week high of Rs 4225 on 15th December 2022, but it failed to hold on to the momentum and witnessed some profit taking.
The retail giant gave a breakout from a 2-year Descending Triangle formation on the weekly charts formed since November 2021 last week. The momentum also helped the stock to climb above the 50-week Moving Average.
In terms of price action, the stock is now trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts.
The daily Relative Strength Index (RSI) is at 61.1.
RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.
“D-Mart stock seems to have a potential for double-digit returns in the short to medium term as the stock is breaking out of a two year triangle pattern,” Lovelesh Sharma, Founder at MarketFeds Analytics LLP, said.
The RSI (Relative Strength Index), which measures the momentum, has crossed above 70, indicating the strength in prices in the short to mid-term, while ADX has been sloping on the positive side, with the current reading at 29.
“The short-term 20-day simple moving average is positive on a 5-day rolling basis, while the 50-MA, the medium-trend indicator, has been positive since the last week of September 2023,” says Sharma.
“The
