Breakout stocks of the day: Bharat Dynamics and Central Depository Services Ltd

With price volume support, Bharat Dynamics and Central Depository Services Ltd are strong bullish flag and pole breakout potential stocks. The stock prices have displayed a breakout and bounced back from support, and both presently trading at Rs 1,894 and Rs 2,011. The breakout aligns with positive signals from technical indicators such as RSI, ADX, and other key metrics, reinforcing the likelihood of continued upward momentum.

Bharat Dynamics Ltd

Daily chart of Bharat Dynamics Ltd

Bharat Dynamics is currently displaying sustained bullish momentum on the daily chart, characterised by a notable breakout of flag & pole. This breakout is supported by the good volume observed today and on up days, highlighting active buyer participation with substantial daily volume today.

Thursday’s trading session began at Rs 1,751 and reached a peak of Rs 1,938. After touching 20-day EMA the stock has successfully breached the all-time high of the chart, indicating a potential continuation sign of the long-term uptrend.

The current stock price is trading above its prior high, driven by increased volume during a particular trading session, indicating that investors are interested in up moves. It has broken the 52-week high with a strong green candle and may set Bharat Dynamics up for a stronger positive trend shift, and the accumulated volume suggests further growth soon. The bounce from the near-lower support, emphasises the stock’s effort to establish new highs.

On the RSI chart, the relative strength index crossed the level of 75 with a strong upsurge, and ADX trading at 32 indicates good directional strength, favouring a few sideways movements. In the event of a retracement, it is essential to monitor key support levels, particularly at 20-day EMA. The minor upper resistance is uncertain, and the overall favourable structure is maintained as the stock consistently trades above crucial moving averages, affirming a sustained long-term upward trend.

Bharat Dynamics Ltd engages in the manufacture of defence equipment.

Central Depository Services Ltd

Weekly chart of Central Depository Services Ltd

CDSL’s current stock performance is characterised by a strong green candle trading at Rs 2,011 and has the potential to continue this strong uptrend, accompanied by a significant increase in trading volume today. Currently, the stock price is breaking a flag and pole structure and acting on the same trajectory to move higher.

Starting at Rs 1,978 on Wednesday, the stock reached an intraday high of Rs 2,044. The last two days’ upsurge is notable as they followed nine days of consolidation, suggesting a likely continuation of the bullish trend if the price manages to close above new higher highs.

The next level of the breakout occurred with a closing of the day candle above the 52-week high, indicating bullish momentum. After reaching its 52-week high, the stock may witness a rapid ascent in the day trading sessions, following sustained levels near Rs 2,000. The current market action is supported by a surge in price volume, surpassing the typical trading day volume.

The relative strength index (RSI) recently traded in a bullish range at 68.43, suggesting the potential for a significant upward movement in the stock price is still there, particularly as it continues to trade above this level. The ADX, currently at 21, indicates satisfactory directional strength with smaller sideways movement. The 20-week Exponential Moving Average (EMA) serves as a crucial support level during larger corrective movements after the breakout, and the overall market structure favours traders if the stock consistently trades above major moving averages.

Central Depository Services (India) Ltd is in the provision of depository services.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.