IDFC Ltd

The stock price of IDFC Ltd is trading in a strong uptrend in weekly chart by preserving ‘Higher Highs Higher Lows’ formation. The ongoing upmove seems to be a copy book ‘Impulse and Corrective Rally’ which led the stock to bounce back sharply from some or the other Fibonacci retracement levels.  The best part of this rally is that it is not a vertical rally, which always tends to fizzle out on profit booking (generally a “V” shape rally is followed by a sharp sell-off too). We are also observing the formation of ‘Inverse Head and Shoulder’ pattern in weekly chart, whose neckline is placed at 166 levels. 

Looking at the daily chart, stock price is moving in sideways direction after hitting the 52 weeks high of 166.65. Recently, Stock has given very strong buy signal by sustaining above the ‘rounding formation’ which is made in past seven weeks. On Monday, stock has retested the neckline of the rounding pattern, which also coincides with ’10 Days EMA’, and bounced back piercingly; thus completed three days corrective pattern. Momentum Oscillator RSI is positively placed and has taken support of the breakout trendline in daily chart.  One can buy this stock at current market price of Rs 155 and on dips to Rs 153 for a target price of Rs 176 – 187. Stoploss for the trade should be placed below 149 levels.