Tube Investment - Technical Brekout

There is one company which produces different component that fit in bicycle as well as in cars. The company we are talking about is Tube Investment. Which is into specialized in engineering, bicycles, metal forming and tube products. The company is likely to show better price performance in near term supported by good fundamental and technical breakout.

On chart, stock prices are volatile. The stock hit 52-weeks’ high of Rs. 684.70 in November 2016, then price revered near to low of Rs. 521.70, in the same month, down by 23.80 percent from its 52-week’s high. Currently, stock price is trading at Rs. 571.80 up by 9.60 percent from its recent low. We feel that there is more steam left and the rally is likely to continue.

On a daily chart, stock price started making higher top and higher low pattern, also we witnessed stock price was trading below 20 DMA from last 36 trading session, but yesterday stock price has surpassed the 20 DMA and closed above the same, indicate stock price has found the support level.

Proceeding on daily chart stock price at Rs. 571.80 has given the breakout at Rs. 567 of symmetrical triangle pattern which has stared from November 2016, in the triangle yesterday stock price has touched the lower channel and price has given the breakout of the upper channel of the pattern, now stock price will rally towards Rs. 640 level.

Tracking Bollinger Band (BB) we find stock price at Rs. 571.80 has closed above the mid band of BB, now stock price will touch the ‘Upper Bollinger Band’ and the bands are widening, thus indicating positive energy. Momentum Oscillator, MACD (Moving Average Convergence & Divergence) has given a positive crossover on a daily chart, favouring the bullish view, which could witness the Tube Investment marching higher.

The trend intensity indicator demonstrates that the stock is gaining strength as months pass by. The psychological sentiment towards the stock remains positive. The stock is also looking positive on the monthly chart, which foretells well for the long term uptrend of the stock. We believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy at CMP and adding more on dips.

Looking towards the chart pattern and study i.e. Bollinger Band, RSI and MACD, we believe stock price may extend its rally towards Rs. 640/680 levels, whereas Rs. 520 will act as a strong support level on a closing basis.