Engineers India gives Flag pattern breakout, can rally up to Rs 135

On the monthly charts, it has rallied nearly 30 percent in the current month and formed a strong bullish candlestick pattern with significantly higher volumes

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Engineers India has formed a robust bullish candlestick pattern and given a nice breakout of the Bullish Flag pattern created in the last three odd weeks, especially after the sharp run up on May 3. As a result, the stock on May 24 gained nearly 7 percent to hit the highest level since November 2019.

Generally, a Bullish Flag pattern breakout indicates the possibility of a further uptrend in stock in the coming days, and may give a return equal to its flag formation.

After forming the Double Bottom kind of pattern in March, Engineers India stock broadly has been in an uptrend and since the second half of April, it had been trading above all key moving averages (50, 100, and 200-day EMA – exponential moving average).

“Engineers India has shown a Flag breakout today. Technically the stock is strong as it is trading above all crucial averages and is forming Higher High and Higher low on daily charts. Near-term support is at Rs 95-100 per share,” Amit Seth, a trader, said.

He advised that those holding bullish positions may do so keeping this support in mind or a negation level of Rs 99.

“Near-term resistance is at Rs 110-112. Once we cross the resistance, the stock may see renewed momentum towards Rs 120-125 levels. However, all positions should be actively trailed and trading profits be protected,” Seth said.

The stock was trading at Rs 107.40, up 6.65 percent on the NSE, with above average volumes, at 13:57 hours IST.

On the monthly charts, it has rallied nearly 30 percent in the current month and formed a strong bullish candlestick pattern with significantly higher volumes. The stock has seen higher highs and higher lows formation for the second consecutive month.

Vidnyan Sawant, AVP – Technical Research at GEPL Capital also said the stock has recently broken out of a consolidation phase that formed post the correction started in January 2018. “The breakout occurred in late April 2023 and signifies the initiation of an upward trend. Specifically, a multi-year breakout of the Rectangle pattern has been observed, further confirming the bullish momentum in the stock.”

Hence, going ahead, he expects the prices to move higher till Rs 135 while the level of Rs 99 can act as a strong support to the prices.

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