Technical Stock Pick: Breakout from Cup and Handle pattern on Naukri makes it an attractive buy
Info Edge Ltd (Naukri), part of the consumer service industry, has been trading above the breakout level of a Cup and Handle pattern on the daily charts.
Short-term traders can look to buy the stock for a possible target of 5900 in the next 6-8 weeks, suggest experts.
The stock gave a breakout from a Cup and Handle pattern in December 2023. The neckline of the pattern was placed around 4900-5000 levels.
The pattern was formed between August 2023 – December 2023 on the daily charts.
There are two parts to the 'Cup and Handle' 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 has been taking support above the 20-DMA on the daily charts since November 2023. It has risen more than 11% in a month and over 20% in the last 3 months.
In terms of price action, the stock is now trading 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 placed at 62.4.
RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed.
The positioning of RSI on daily as well as weekly charts is still around 60 and provides room for longs to enjoy further upside in the stock.
“Info Edge or Naukri stock given a breakout of the cup pattern a few weeks ago and the prices have been consistently sustaining above it since then. The pattern exhibited over 4 months and the breakout happened with rising volumes,” Aditya Thukral, Founder and analyst for AT Research & Risk Managers, said.
“Now that the prices are taking support of the rising trend
