Chart Check: This Sensex stock breaks out from a downward sloping trendline; time to buy?
Tech Mahindra Ltd, part of the Indian IT sector, rose more than 3% in a week to break out from a Flag pattern on the weekly charts and is consolidating at the breakout area of 1-year long consolidation.
Tech Mahindra stock which is also part of the S&P BSE Sensex hit a 52-week high of Rs 1,276 on 8th September 2023.
The stock gave a breakout from a downward sloping trendline on the weekly charts and a Flag pattern on the daily charts, suggest experts.
The breakout has opened room for the stock to head towards 1500 levels, feel experts.
The stock is also consolidating around the breakout area of 1170. The stock hit a high of 1165 in September 2022 but it failed to hold on to the momentum.
It found support above 950 levels before bouncing back.
The stock gave a breakout from the said range in July 2023 but quickly pared gains. It found support above 50-week moving average on the weekly charts towards the close of July 2023.
The stock is now consolidating above the breakout area.
It closed at Rs 1262 on 8 September 2023. The stock has been making higher highs and higher lows for the past 2 weeks.
In terms of price action, the stock is now trading well above most of the crucial short- and long-term moving averages, which is a positive sign for the bulls.
The daily Relative Strength Index (RSI) is at 65.5.
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.
The Nifty 50 index has recently broken out on the upside after consolidating for over a month within the range of 19250 to 19600, indicating a bullish trend.
Similarly, the IT Index has also given a breakout after consolidating for 16 months, and the IT sector is
