Monthly Analysis – Wipro Limited
On the above Monthly chart we can clearly notice a Bullish engulfing candle pattern which is preceded by a long legged candle. The stock bounced from a strong weekly support in the month of March 2020 and since than the lows are protected. The next monthly supply zone is placed at 250 levels. The price action is bullish. Since the prices have extended we are expecting a pullback (not more than 50%) of the last candle before a entry can be made on the long side.
Continuing with the monthly charts we now look at the RSI. We can notice that the RSI has taken support on the 40 levels and turned up and the mini RSI is failing to get oversold and have turned too.
This indicate the support of the momentum that RSI is providing to the prices. On a longer term perspective Wipro may start to move up in the months to come. The volumes are also suggesting good accumulation has taken place this month.
The above is the weekly chart. The prices have formed a big bullish candle with volumes, breaching a falling trendline. Also notice how well the 190 support levels held for certain weeks. The blue lines are resistance levels on weekly frame, we see 230 may pose a resistance for the stock. The RSI is now into 60-40 zones close to 50 levels. As indicated on the monthly charts we need to wait for a correction to enter the stock, the 50 levels may hinder this move for some weeks. 190 levels will be acting as a strong support.
On the daily chart we notice a breakout for consolidation with volumes. The RSI has already moved into a bullish zone after it bounced off from the 60 levels. The mini RSI is above 80 the RSI 14 is close to 80. We may witness some technical pullback here. The moving averages on the RSI are sloping up, indicating strength.
On our moving average template, we notice the stock shot up from the cluster and now its banging on one of the longer term average. This also signals towards a correction that we may get in near future.
We can plan entries once the stock returns close to the shorter term moving averages and RSI retraces creating a PR.
The stock is outperforming the Nifty and ATR has already started to pick up (ATR rising with the stock suggests good volatility and range expansion – which suggests that the moves will be lively). The outperformance suggests strength in the stock via a vis to Nifty.
Now lets have a look at the trend strength via AO and ADX. We can see the AO has turned positive and +DMI is dominant with ADX moving above 20. This indicates strength in trend as well.
In a nutshell the overall trend has turned BULLISH we can wait for retracement to 203 – 200 levels to refine our entries with proper momentum signal to support our bullish view. The protection levels can be kept close to 190, while we may target 230, 250 & 260 in near term.
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