Timken India Ltd: Poised for Technical Breakout

Company Overview

Founded on June 15, 1987, Timken India Ltd. is a prominent player in manufacturing, distributing, and selling anti-friction bearings, primarily tapered roller bearings, other roller bearings, components, accessories, and mechanical power transmission products. Headquartered in Bangalore, India, the company serves a diverse customer base and also provides maintenance contracts and refurbishment services.

Market Performance and Technical Analysis

Towards the end of November 2022, Timken India Ltd. embarked on a retracement of its previous rally that commenced in December 2018 at the Rs 500 level. This retracement unfolded with lower highs and lower lows, forming a typical Double ZigZag Elliott wave pattern. The stock’s retracement phase found significant support at the critical 38.2% Fibonacci retracement level, just above the 200-week moving average, establishing a robust foundation for potential upward movements and signaling a promising outlook.

Timken India Ltd. recently attracted attention by surpassing its lower highs trend, potentially concluding its correction phase and entering a bullish run. Notably, the stock reached Rs 3575 in the first week of May 2024, marking a significant milestone and signaling a potential breakout from a continuation price pattern. Analysis of key trendlines drawn from all lower highs suggests a breakout level around Rs 3410, paving the way for a trend continuation.

Future Outlook

In recent trading sessions, Timken India Ltd.’s stock witnessed an impressive surge of more than 3%, accompanied by substantial trading volumes exceeding 8.8 lakh shares, which are above average. A weekly close above the Rs 3410 level will confirm the breakout from the identified price pattern, further strengthening the stock’s bullish momentum.

Looking ahead, the current trajectory indicates a potential target of Rs 4100, representing a substantial gain of nearly 20% from the projected breakout point. A confirmed breakout above the Rs 3410 level is expected to initiate this upward trajectory, presenting investors with an appealing high-reward opportunity.

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.