Chart Check: Up 20% in a month, this NBFC gave a breakout from rectangle pattern; time to buy?

IIFL Finance, part of the NBFC space, rallied more than 20% in a month to hit a fresh multi-year high last week and the recent chart structure suggests that the rally may not be over yet.

Short-term traders who missed the rally can look to buy the stock now or on dips for a possible target above Rs 500 in the next 3-4 weeks, suggest experts.

The NBFC stock hit a fresh 52-week high of Rs 449 on November 18, 2022. It has rallied more than 11% in a week, and over 20% in a month.

The stock has been on buyers’ radar which helped the stock to break out from a rectangle pattern on the weekly charts. The neckline of the pattern was placed at Rs 369.

The stock is trading above the crucial 50-WMA on the weekly charts which is a positive sign for the bulls.


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On the daily charts as well, the stock is trading above the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA which is a positive sign for the bulls.

While looking at the border picture of IIFL, we can spot that post March 2021 the stock did not correct while getting into lower low, lower high formation which illustrates that the stock is relatively stronger.

“Prices gave a breakout from the rectangle pattern in the last week which indicated the beginning of the trend to the upside. The breakout was preceded by the shortfall in the pattern which shows the enthusiasm by the crowd for the breakout,” Omkar Patil, Technical Research Associate at GEPL Capital, said.

Prices since June 2022 have taken support from a 20-week EMA, where recently prices have started to deviate on the upside pointing towards the continuation of the prior uptrend.

“The breakout was confirmed as it is followed by higher volumes. RSI on the weekly timeframe has shown a breakout too, reflecting the rising momentum. Going ahead, we expect the prices to go higher till Rs 530 where the stop loss must be Rs 412 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)