Tech Stock Pick: 20% rally in a month! Cochin Shipyard gives a breakout from a Rounding Bottom pattern; should you buy?
Cochin Shipyard Ltd, part of the shipbuilding space, has rallied by about 20% in a month which helped the stock to breakout from a rounding bottom pattern on the daily charts.
The breakout has opened room for the stock to head above 1500 levels in the next 3-4 months, suggest experts.
The stock rose from Rs 1081 as on 17th November 2023 to Rs 1307 recorded on 19 December 2023 which translates into an upside of over 20% in a month. The stock hit a record high of Rs 1337 on 19 December.
The stock faced resistance above 1200 levels in September 2023 and it failed to hold on to the momentum.
It witnessed a price correction which took the stock towards 870 levels in October 2023.
The ship-building stock found support above 870 levels in October 2023 and then bounced back which took shape of a rounding bottom pattern on the daily charts. The neckline of the pattern was placed at 1250 levels.
“A new bullish leg in Cochin Shipyard is visible as the stock prices form a saucer pattern.
The saucer pattern, also known as a rounding bottom, is a technical analysis pattern resembling a «U» on a price chart. It signifies a gradual transition from a downtrend to an uptrend in an asset's price,” Lovelesh Sharma, Founder at MarketFeds Analytics LLP, said.
“This pattern suggests a reversal of the previous downward trend and typically indicates bullish sentiment in the market.
