GRSE gives Pennant breakout, expected to test Rs 960 in short term

Technical charts of Garden Reach Shipbuilders (GRSE) indicate a breakout of a bullish pennant pattern on the daily scale. According to Sudeep Shah, Head of Derivative and Technical Research at SBI Securities, the GRSE script is expected to test the levels of Rs 960 and Rs 990 in the short term.

At 9.50 am on January 11, GRSE was trading at Rs 908.65 on the National Stock Exchange, up 3 points, or 0.35 percent, from the previous close.

Technical chart of GRSE showing pennant breakout pattern | Source: SBI Securities

On January 10, the stock witnessed a substantial increase in trading volume, exceeding four times the 50-day average volume of 11.77 lakh, reaching a total volume of 43.14 lakh shares, Shah said. The breakout was accompanied by the formation of a significant bullish candle, reinforcing the strength of the upward movement.

“Currently, the stock is trading above its short and long-term moving averages. These averages are on an upward trajectory and are arranged in a favorable sequence, indicating a robust trend. The daily Relative Strength Index (RSI) is currently at a level of 68.43, marking its highest point since September 2023,” Shah said.

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Other volume-based indicators such as On-Balance Volume (OBV) and Money Flow Index (MFI) were exhibiting considerable strength, further supporting the positive momentum in the stock, he added.

These factors are aligning in the favour of bulls. Shah recommends accumulating the stock in the Rs 910-900 zone with a stop loss of Rs 865.

On the upside, the stock likely to test Rs 960 and Rs 990 in the short term, he said.

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