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    Chart Check: After a rounding bottom breakout this smallcap stock could hit fresh record highs; time to buy?

    Synopsis

    The stock which is part of the S&P BSE Smallcap index is sustaining above the neckline of the rounding bottom pattern placed closer to Rs 300 which suggests that the upside remains intact. The stock closed at Rs 344 on 20 January 2023.

    image (2) (2)ET CONTRIBUTORS
    Vardhman Special Steels Ltd (VSSL), part of the iron & steel industry, rallied more than 30% in the last 3 months which helped the stock to break out from a rounding bottom pattern.

    Short-term traders can look to buy the stock now or on dips for a possible target above Rs 400 in the next 3-4 weeks, suggest experts.

    A rounding bottom is formed when the market sentiment shifts from bearish to bullish at a steady pace. Also Read

    The stock which is part of the S&P BSE Smallcap index is sustaining above the neckline of the rounding bottom pattern placed closer to Rs 300 which suggests that the upside remains intact. The stock closed at Rs 344 on 20 January 2023.

    In terms of price action, it is trading above most of the crucial short and long term moving averages of 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.

    image (2) (2)ET CONTRIBUTORS

    The Relative Strength Index (RSI) is at 69.9. RSI below 30 is considered oversold and above 70 is considered overbought, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator

    “VSSL is currently trading at record highs which tells that the stock already is in strong momentum. The stock now has started to rise upward post the breakout from the rounding bottom pattern,” Omkar Patil, Technical Research Associate at GEPL Capital, said.

    “The breakout was witnessed on 12th December 2022. This illustrates a continuation of the prior uptrend. The stock on the daily timeframe is trading above all its key moving averages, the 50, 100, & 200 Days EMA. This confirms the uptrend,” he said.

    Additionally, the relative strength index, a momentum indicator has shown a breakout too, reflecting strong bullish momentum in the trend.

    “Going ahead we expect the prices to move higher till Rs 425 where the stop loss must be Rs 300 on the closing basis,” recommends Patil.

    (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)






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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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