Technical Analysis

Stock pick of the week: Equitas Holdings

Yoganand D | Updated on December 01, 2019 Published on December 01, 2019

Investors with a medium-term horizon can buy the stock of Equitas Holdings at current levels. Last week, the stock broke out of a descending channel by gaining 16.7 per cent, accompanied by good volume.

This descending channel breakout on the upside indicates that the downtrend appears to have come to an end and the bulls have taken control. In June, the stock encountered a key resistance at ₹143 and began to decline. The price action until last week appeared to be the formation of a descending channel.

The stock took support at ₹82, recording a 52-week low in early November, and changed direction. Since then, it has been in a short-term uptrend. While trending up, the stock conclusively breached its 21- and 50-day moving averages and a key resistance at ₹100 in the past week. Moreover, it trades well above these moving averages.

There has been an increase in daily volume over the past four trading sessions. The daily relative strength index (RSI) has entered the bullish zone from the neutral region and the weekly RSI features in the neutral region. Besides, the daily price rate of change indicator features in the positive terrain, implying buying interest.

The medium-term outlook is bullish for the stock after the descending channel breakout. Targets are ₹120 and ₹125. Investors with a medium-term view can buy with a stop-loss at ₹96.

Published on December 01, 2019
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