Technical analysis: Prince Pipes breaks out from consolidation

Prince Pipes breaks out from a multi-week consolidation. Read on to find out more.  

Prince Pipes & Fittings Limited is a multi polymer manufacturer and provides integrated piping solutions. It came into existence in 1987 and in the initial stages used to only manufacture PVC products. However, it eventually began manufacturing polymer piping solutions, and now mainly manufactures four types of polymers namely CPVC, UPVC, HDPE and PPR. 

In December 2019, Prince Pipes came out with an Initial Public Offering (IPO) and raised Rs 500 crore of which 50% was Offer for Sale (OFS) and 50% was a fresh issue. The offer price was Rs 178 per equity share but failed to provide any listing gains to its investors, as on the listing day, it made a high of 174.3 and closed at 163.5. However, over the period it has had a spectacular journey as the stock is currently trading at 847. 

Having said that, the stock began to rally from June 2020 and finally took a breather in May 2021 after making a high of 790.4. Since then, the stock has been moving into consolidation. In fact, it also made a low of 592.25 in August 2021. However, the stock gave a breakout on weekly charts last week. On lower time frames, the stock did give a pullback and again began to move in a consolidation. The immediate support for the stock is placed at 825.6 and resistance at 866.45 followed by 895.05. 

The Relative Strength Index (RSI) is trading in the overbought zone at 74.47, whereas it is still above its 9-Day Exponential Moving Average (EMA). Moving Average Convergence Divergence (MACD) is showing positive signs as it gave a positive crossover on the breakout in the positive territory. Bollinger band, on the other hand, is showing signs of a possible pullback as the price is currently trading above its upper band. 

At the time of writing, the stock was trading at 848.6 levels.