Charting the course: A technical analysis of HFCL Ltd

HFCL Ltd, an Indian manufacturer and marketer of telecom equipment and turnkey services, has recently demonstrated an exciting increase in its price movements and caught the interest of traders and investors worldwide. We observe strong positive signals in the current market attitude, providing a nuanced picture for the near future.

Let’s weave our way through the HFCL technical tapestry, studying key indications and trends to identify the different paths that this dynamic stock might take.

HFCL Ltd

Weekly chart of HFCL Ltd

The weekly chart of HFCL Ltd indicates a favourable buying opportunity, with the stock currently trading at Rs 92.20, surpassing its previous 52-week high. A strong support level is observed in the range of Rs 81 to 50-day EMA, mitigating the likelihood of abrupt downward movements. A modest resistance is present just above the current level at Rs 176, with a more substantial target at Rs 101.35

Having declined from Rs 101.35 in 2022, the stock found support at Rs 51 towards the middle of 2022, exhibiting consolidation throughout 2023. The recent breakout of the symmetrical triangle chart pattern, accompanied by robust weekly bullish candle formation and continuous upsurge, signals the initiation of a bullish uptrend. Increased trading volumes, surpassing averages, further validate the positive momentum.

The stock is trading above crucial moving averages, with the 20-day EMA crossing above the 50-day EMA towards the second of last week’s conclusion, indicating a bullish trend. Additionally, the stock respected the 20-day short-term moving average, reinforcing the upward trajectory.

Technical indicators corroborate the upward potential, as the Relative Strength Index (RSI) ascends from the neutral zone to the bullish range of 65-80. The stock’s relative strength against the Nifty 50 is poised to turn positive at it is exactly at 0, with the ADX indicator at a level of 40 on the daily chart, suggesting a good directional strength rising.

Daily Technical Analysis

Daily chart of HFCL Ltd

Examining the daily chart, a golden cross, signalling bullish momentum, occurred a few days ago, and the stock price has since reflected this positive development. Volumes have experienced an uptick, indicating increasing market participation. Despite the favourable outlook, attention is warranted at the Rs 101 resistance level, which may impede further upward movements.

The technical analysis of HFCL Ltd, both on a weekly and daily basis, suggests a bullish sentiment, supported by various indicators and chart patterns. Traders and investors may find the current levels conducive to entering long positions, keeping a watchful eye on key resistance levels for potential price reactions.

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.