Technical Analysis: Grasim Industries gives a breakout

Grasim Industries has given a breakout from the flag chart pattern. Read on to find out more. 

Post making a low of 380.45 in March 2020, Grasim Industries continued to remain in a good uptrend making higher highs and higher lows. However, after making a higher high of 1,798.4 on October 18, 2021, the stock moved into a small consolidation making a series of lower high and lower lows on the lower time frame chart. But on daily charts, the stock made a higher low of 1,669.15 on October 25, 2021. And on November 1, 2021, the stock finally breached the flag like chart pattern with increased volumes.

The immediate resistance that the stock might face is placed at 1798.4, while its immediate support zone is 1,694.3-1,669.15. The stock presently is trading above its 9-Day, 20-Day and 50-Day Exponential Moving Average (EMA). Moreover, you can consider 50-Day EMA to be its trailing support level. The Bollinger band does suggest a potential pullback from current levels as the price is currently trading near the upper band.

The 14-Day Relative Strength Index (RSI) is inching high and is presently trading at 65 which is above its 20-Day EMA of 62. Moving Average Convergence Divergence (MACD) is showing positive crossover on the breakout and is trading in the positive territory. In the shorter time frames, the price is trading below its Parabolic SAR. This suggests a possible pullback from present levels. Even the Commodity Channel Index (CCI) is presently hovering above the 100 level, suggesting an overbought situation.

Grasim Industries is likely to release its Q2 FY22 earnings by November 11, 2021. It would be interesting to see how the price reacts. However, from the present analysis, it seems that the uptrend is likely to continue as there are no signs of a trend reversal. However, the technical indicators such as Bollinger band, Parabolic SAR and CCI is suggesting a potential pullback from current levels.