Chart Check: CRISIL breaks out from a 1-year-old Cup and Handle pattern on weekly charts; time to buy?
CRISIL, part of the financial services industry, gave a breakout from a one-year-old Cup and Handle formation on the weekly charts which has opened room for the stock to head towards 4400 levels in the next two months, suggest experts.
Short-term traders can look to buy the stock now while investors holding the scrip can accumulate it on dips.
The momentum helped the stock to hit a record high of Rs 4070 on the BSE on 23 August 2023.
The stock witnessed a corrective phase after it touched a high of Rs 3860 on 2 May 2022. The stock underwent a period of consolidation and found support above Rs 2700 in December before bouncing back.
The 'Cup and Handle' pattern is easy to identify.
There are two parts of this pattern wherein one part is a U-shape cup and another one is a small handle.
The handle gets formed when the stock undergoes a period of consolidation, and the pullback usually traces at least one-third of the cup.
The stock gave a breakout from the neckline of the Cup pattern in June 2023 when the stock touched 4000 levels. The stock underwent a period of consolidation beginning June.
The financial services stock largely moved in a range June onwards and gave a breakout from the swing high of Rs 4028 on 12 June 2023.
It then hit a record high in August.
In terms of price action, the stock is trading well above most of the crucial short-long-term moving averages such as 5,10,20,30,50,100 and 200-DMAs on the daily charts which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 61.5. RSI below 30 is oversold and above 70 is considered overbought.
