Defence Stock Eyes Rally After Forming Ascending Triangle Pattern

Synopsis: Hindustan Aeronautics Ltd is exhibiting an ascending triangle pattern on the 30-minute chart, indicating a potential short-term bullish trend.

An ascending triangle is a bullish continuation pattern characterized by a series of higher lows and a horizontal resistance level. This forms a triangular shape, signaling rising buying pressure as buyers steadily push prices upward toward the resistance.

The chart shows that the ascending triangle pattern has successfully triggered a bullish breakout, with the price moving above the horizontal resistance. When accompanied by strong volume, this breakout indicates increasing buying pressure and points to a potential upward move in the near term.

On Friday, Hindustan Aeronautics Ltd broke above the neckline of the ascending triangle on the 30-minute chart and sustained trading above the Rs 4,185 level, reinforcing its bullish momentum.

For an ascending triangle, targets can be identified at nearby resistance levels or by adding the triangle’s height to the breakout point. Traders typically watch volume and momentum for confirmation and may trail profits as the price advances after the bullish breakout.

Hindustan Aeronautics Ltd Chart: 30-minute Timeframe

Indicator Confirmation

• RSI: The daily RSI indicates bullish momentum, as it rose from 42.3 in the previous trading session to 45.2 on Friday, confirming the bullish reversal.
• Price Volume Trend: The Price Volume Indicator confirms the uptrend, accompanied by a sharp increase in buying volume in the daily time frame.

Implications

The ascending triangle pattern signals potential upside, and sustaining above the Rs 4,185 support level, especially with strong volume, would strengthen near-term bullish momentum.

About the stock

Hindustan Aeronautics Limited (HAL) is a Indian Public Sector Enterprise and a Maharatna company. Incorporated in 1963 and headquartered in Bengaluru, it operates under the Ministry of Defence. HAL is a global leader in the aerospace and defence industry, specializing in the design, development, manufacture, repair, and upgrade of aircraft, helicopters, aero-engines, avionics, and aerospace structures to achieve national self-sufficiency in the sector.

Over the past month, Hindustan Aeronautics Limited has fallen 5.53%. Over the past six months, the stock has declined 7.04%, although it is still up 14.91% compared to its level a year ago.

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