Chart Check: A breakout from symmetrical triangle makes this tyre & rubber products maker an attractive buy

Balkrishna Industries, part of the tyre and rubber products industry, has rallied by over 30% from March 2022 lows which helped the stock to breakout from a Symmetrical Triangle formation on the weekly charts in January 2023.

The stock hit a 52-week high of Rs 2,536 on 18 January 2022 but it failed to hold on to the momentum. The stock bounced back after taking support at Rs 1,681 on 7 March 2022.

Triangles are formed when the market loses interest in a counter but then picks up momentum. A breakout on the higher side from the pattern means bulls are likely to dictate price trends.

A symmetrical triangle is commonly considered a continuation pattern. Also Read

Tracking the momentum, short-term traders can buy the stock now or on dips for a target closer to Rs 2,400, suggest experts.

The stock rose more than 6% in a month and more than 16% in the last 3 months.

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


The Relative Strength Index (RSI) is at 70.9. RSI above 70 is considered overbought. This implies that the stock may show a pullback. MACD is above its center and signal line, this is a bullish indicator.

Over the past couple of weeks, the auto sector is finding traction on the higher side. Looking at sub-sectors of automobiles -- tyre stocks are leading stocks among other auto stocks. In the tyre space, Balkrishna Industry looks promising, suggest experts.

“From a technical perspective, the stock has given a breakout on the higher side from a symmetrical triangle. It is a bullish development. Recent correction halted at role reversal support level, it coincides with positional moving average,” Kapil Shah, Technical Analyst, Emkay Global Financial Services Limited and Trainer at FinLearn Academy, said.

“On the daily chart, the stock is respecting support and disrespecting resistance. The stock has ironed out the immediate hurdle which gives a bullish sign,” he said.

“Based on the aforementioned rationale, stocks look good for buy opportunities in the range of Rs 2,233 to Rs 2,170 range with stop loss of Rs 2,120 on a closing basis,” recommends Shah.

“Upside potential for a stock is up to Rs 2,400 level. Duration for the trade can be for 2 months,” he added.

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