Breakout from descending triangle pattern could take this garment stock towards April 2022 highs
KPR Mill, part of the garment and apparel maker, picked up momentum in the last one month which helped the stock to break out from a descending triangle pattern on the weekly charts. The breakout has opened room for the stock to retest its 52-week highs in the next 2-3 months, suggests experts.
KPR Mill stock hit a 52-week high of Rs 704 on 18 April 2022 but it failed to hold on to the momentum. The stock reversed losses after hitting a low of Rs 479 on 26 December 2022. The stock rose more than 16% in the last one month which helped the stock to breakout from a descending triangle pattern which is a bearish pattern. A breakout suggests that bulls have taken control.
Descending triangle is a continuation of a bearish pattern where the next move will be in the primary trend. The stock has a strong base near the 38.20% Fibonacci retracement level of the previous upward movement from 63 (March 2020) to 769 (January 2022).
In terms of price action, the stock is trading well above short and long-term moving averages such as 5,10,30,50,100, and 200-DMA on daily charts which is a positive sign for the bulls.
“KPR Mill stock has exhibited a bullish trend since March 2020, and despite a recent correction, it has not dropped below the 38.20% Fibonacci retracement level of the previous upward movement from 63 (March 2020) to 769 (January 2022),” Omkar Patil, Technical Research Associate at GEPL Capital, said. “This indicates that the prices have a favorable sentiment, and suggests a potential for further upward movement,” he said. “The stock KPR Mill has demonstrated a significant technical development on its weekly timeframe, as it has successfully broken out of a descending triangle pattern, Indicating continuation of the prior uptrend,” highlighted Patil. On the daily timeframe, the stock KPR Mill has been persistently trading near the upper Bollinger Band, indicating an increase in volatility for a potential upward movement. The RSI on the weekly timeframe has given a breakout too which shows strong bullish momentum. “Based on these technical indicators, it is expected that the stock's prices will continue to rise towards the level of Rs 700, with a recommended stop loss at Rs 550 on a closing basis,” recommends Patil.
