On a Daily time frame, the stock has witnessed a breakout of Cup and Handle Pattern. The pattern has formed at the lower level and has given a breakout with a gap forming a breakaway gap.

The significance of the breakaway gap is the start of a new trend.

The Potential of stock moving higher after the breakout is been supported by the EMA which works as a trend indicator as well as Support and Resistance.

Currently, the security is trading above the Fast (54) EMA and Slow EMA (18) indicating a positive trend. The slow EMA is trending upward confirming the direction, the fast EMA is flattening indicating a pause in a fall.

The Directional Indicator DMI in which DI+ is trading above DI- indicates a positive trend whereas the ADX trading above DI- indicates strength in the upward move.

Hence based on the above technical setup, one can enter a long position at CMP 

Cup and Handle Breakout

Sep 16 2023