Bullish Momentum in D-Link (India): Potential Breakout Opportunity

Amidst bullish to sideways market sentiments, the IT hardware industry stocks have caught the attention of investors, and one stock that has surged over 7.5% and is on the cusp of a medium-term breakout.

The stock in focus is D-Link (India) Ltd, a company primarily involved in marketing and distributing networking products. With a widespread distribution network and a diverse product portfolio, including network switching, wireless local area network, Internet protocol surveillance, and more, D-Link has a nationwide reach across India. Established in 1986, the company is headquartered in Mumbai, India.

From a technical perspective, the stock has been consolidating within a range, forming lower highs at Rs 311 and higher lows at Rs 171.70. Notably, a swing high was observed at Rs 294 on May 02, 2023. 

By connecting this swing high with the high of November 07, 2022 (Rs 311 level) using a trendline, we can identify a breakout trendline indicating a bullish pennant pattern on the daily chart. Furthermore, this consolidation is supported by the 200DMA and 14-day period RSI also placed at a super bullish zone around 68 level adding to its strength. Interestingly, the stock is currently trading just below this breakout trendline around Rs 278, suggesting a potential breach of the consolidation range in the upcoming sessions and confirming the breakout of the discussed price pattern.

Considering the breakout level of Rs 289, the minimum potential target for this breakout stands at around Rs 350, which represents a gain of approximately 20% from the mentioned breakout level. Therefore, swing traders and short-term investors should closely monitor this stock, as it demonstrates robust performance and the potential for a breakout shortly.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.