KPIT Technologies registers a triangle breakout! What should traders expect?

KPITTECH soared over 4% on Friday  

The stock of KPIT Technologies is the top buzzing stock on Friday’s trading session, having surged over 4% accompanied by strong volumes. It has registered a breakout from its triangle pattern and has attracted traders’ attention, given the fact that the volume is greater than 10-day, 30-day and 50-day average volume. It has jumped over 10% in just 2 trading sessions and is above all its key moving averages.   

After correcting about 45% from its lifetime high of Rs 801, the stock is in spotlight, having retraced 38.2% of its initial downtrend. The stock is likely to have made bottom and is expected to trade higher with such strong price action.   

The 14-period daily RSI (66.19) is above its prior swing high, which is a positive sign. The MACD has given a bullish crossover. The +DMI is well above its -DMI, and higher OBV suggests strong strength from volume’s perspective. The Elder Impulse system has charted 2 consecutive bullish candles, which indicates strong buying momentum. The TSI and KST indicators are also showing strong upward momentum. The Relative Strength (RS), which is in the bullish zone, suggests an outperformance of the stock against the broader market.   

Considering the above factors, the stock has become technically strong. Traders can expect it to test the level of Rs 635, followed by Rs 660 in short to medium term. One can keep a stoploss 200-DMA level of Rs 535. Strong price structure, backed by huge volumes and bullish technical is what a momentum trader wants, and this stock perfectly fits into this setup! Include it in your watchlist to track its price development.   

KPIT Technologies is a technology company engaged in computer programming, consultancy, and allied businesses. With the market capital of about Rs 14200 crore, it is one of the strong growing midcap IT company among its peers.