There is a compelling argument for a possible change in trend direction for VALIANTORG.IN.
The stock has a relatively brief listing history on the NSE. However, upon analyzing the weekly chart, it appears that after a significant decline, the stock might be in the process of reversing its trend.
VALIANTORG.IN became listed on the NSE in October 2020, resulting in the formation of a Symmetrical Triangle pattern in its price action. The stock broke down from this pattern and experienced a continuous decline until April of this year. From its peak at 1977 in December 2020, the stock dropped to a low of 355 in March of this year.
Several technical indicators on the chart suggest that the stock may have found a bottom. The recent phase of decline has coincided with a notable bullish divergence of the RSI in comparison to the price. While the price reached lower lows, the RSI formed higher bottoms, indicating a bullish divergence.
The On-Balance Volume has exhibited a significant spike and is currently trading near its highest point. This surge in volume suggests substantial accumulation of the stock during its recent decline. Furthermore, there has been a substantial increase in volumes near its lowest point, further indicating a potential bottom formation.
Presently, the stock is situated in the improving quadrant of the RRG, indicating a likelihood of better relative performance compared to the broader NIFTY 500 Index.
If the expected trend reversal occurs, the stock has the potential to experience significant price appreciation, potentially reaching levels between 800 and 875, especially when held for a medium to long-term time horizon. Given its current levels, it would be a favorable addition to an investment portfolio. However, if the stock slips below 355, it would invalidate this technical setup.
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Milan Vaishnav, CMT, MSTA | Consulting Technical Analyst | www.EquityResearch.asia | www.ChartWizard.ae
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