Deepak Nitrite Limited looks promising to enter into a trade

Deepak Nitrite Limited has developed a sideways trend in the past one year. In the long term chart the stock is trading strong inside a rising trend channel and has taken support at the lower trend channel line.

It has recently given buy signals from small rectangle and double bottom formations. The stock price is very close to its target of 252 rupees from the formations, but can still go higher. There is resistance around its previous peaks of 279 and 299 rupees, while support is around the 236 and 223 levels. Hence the risk reward ratio is favourable.

Volume tops and volume bottoms correspond well with tops and bottoms in the price. Volume balance is also positive, which strengthens the stock. RSI above 70 shows that the stock has strong positive momentum in the short term. Investors have steadily paid more to buy the stock, which indicates increasing optimism and that the price is expected to continue to rise. The stock is overall assessed as technically positive in all time frames.

Recommendation one to six months: Positive