The market remained volatile today but within a range. The gap-down opening, followed by a brief recovery, a fall again to break the day’s low and then recovering back to close the session flat was a good day for non-direction options sellers. There was a good mix of both the long and short opportunities in today’s session in stock-specific counters.
One such stock is Trident (NS:) Limited which has been catching investors’ attention for the last few sessions. The company has a market capitalization of INR 18,692 crores and is in the business of textile and manufactures terry towels, yarn and straw-based paper.
Image Description: Daily chart of Trident with the RSI at the bottom
Image Source: Investing.com
The stock has risen for the third consecutive session today, depicting a good ongoing momentum. Today, Trident shares rallied 2.28% to INR 38.2 and ended the session at the highest level since 23 September 2022. The volume behind today’s move has also been a bit higher than the average. Today the stock garnered a total volume of 7.68 million shares on the NSE which is roughly 56% higher than the 10-day average volume of 4.91 million shares. A higher volume in the direction of the trend depicts its strength and often becomes a good indicator to denote the reliability of the existing trend.
A few sessions back, the stock had taken support from around INR 36 – INR 35.5 which is a very robust demand zone. This level had been tested multiple times since July 2022 and every time the stock bounced from this zone, it had seen a decent pullback. This is repeating again which could propel the stock to a previous swing high of INR 42, which depicts a 10% move from the CMP.
Another factor to consider is that the stock has also breached its falling trendline resistance which could help accelerate the current up move. This is a trend change signal and marks the end of the previous fall and the start of a potential rally.
To gauge the momentum, the RSI (14) on the daily chart has also been moving higher and on Friday it closed above 50 which is showing strong positive momentum in the stock. As long as the RSI is moving higher, the momentum in the stock could be deemed to be on the positive side. However, if there comes a correction, the demand zone of INR 36 – INR 35.5 is expected to halt the correction, but a fall below it might require an exit by long holders.