V Guard Industries Ltd (NS:VGUA) manufactures innovative and experiential products in electronics, electricals, and consumer durables. From being known as voltage stabilizers across South India, it transformed into a brand offering a broad range of engineering products to consumers pan India. The stock is trading at a discount of 7% to its all-time high / 52- week high level. The 52-week high and 52-week low range is Rs 282 and Rs 162, respectively.
Technical observations:
One-week time frame: (Fig 1)
On the weekly time frame, V-Guard stock has made a beautiful Cup and Handle pattern. After breaking a long-term resistance level of Rs 252, it touched an all-time high of Rs 282. Later the scrip pulled back to Rs 252 level from where it has bounced back. You may now safely assume that Rs 252 level should act as a powerful support level. Note that heavy volumes accompany the upward movement in the stock. The Relative Strength Index (or RSI) of more than 60 also denotes strength in the stock’s positive momentum. Long-term investors should enter at the current level by keeping Rs 226 as stop-loss on a weekly closing basis.
One-day time frame: (Fig 2)
On a daily time frame, V-Guard stock broke out of a Falling Channel on September 6, 2021. This breakout is seen with a follow-up move accompanied by above-average volumes. On September 7, the share crossed an intermediate resistance level of Rs 262. We expect the upward movement to continue with the help of volumes. Above 60 RSI level denotes positive momentum on the scrip. Positional traders should enter at the current level by keeping a strict stop-loss of Rs 244 on a daily closing basis.