Chart Check: Breakout from Triangle pattern on weekly charts suggests Cyient could retest September highs

Cyient Ltd, part of the IT-enabled services industry, has rallied about 10% in a week which helped the stock to break from a Triangle formation on the weekly charts.

The breakout has opened room for the stock to head towards 1942 levels in the next 3-4 weeks, suggest experts.

The stock rose from Rs 1668 on 13th November to Rs 1834 as of 20th November which translates into an upside of 9.5% in a week.

The IT stock hit a record high of Rs 1945 on 5th September 2023, but it failed to hold on to the momentum. The stock witnessed a strong base formation above 1500 levels on the weekly charts.

The recent momentum helped the stock to break out from a Triangle formation on the weekly charts which is a positive sign for the bulls. Read More
https://economictimes.indiatimes.com/markets/stocks/news/technical-analysis-ascending-descending-triangles/articleshow/70599015.cms

The stock has rallied more than 18% in the last 3 months, and more than doubled investors’ wealth in the last 1 year.

In terms of price action, the stock is trading well above most of the crucial short- and long-term moving averages such as 5,10,30,50,100 and 200-DMA on the daily charts.

The daily Relative Strength Index (RSI) is at 67.9. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is above its center and signal Line, this is a bullish indicator.

“The weekly chart of Cyient reveals a healthy base formation after a robust rally. During this period, volumes dried up, indicating a healthy corrective phase. Following this consolidation, the stock experienced a breakout, signaling a resumption of positive momentum,” Omkar Patil, Technical Research Associate at GEPL Capital, said.

“The stock demonstrated a breakout from a triangular pattern, providing additional clarity and confirmation of its upward trajectory. This pattern suggests a potential continuation of the bullish trend,” he said.

“Analyzing the ratio chart of CYIENT against the NIFTY, it reveals a sustained outperformance compared to the broader market index. This further accentuates the stock’s relative strength and indicates a favorable position compared to the overall market,” highlights Patil.

“Going ahead, we expect the prices to move higher till 1942 level where the stop loss must be 1664 strictly on the closing basis,” he recommends.

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