clean science and technology shares: Chart Check: Can fortune reverse for this commodity chemical stock after a 28% fall from highs? – Blue Barrows

Clean Science and Technology, a chemical manufacturing company, is down by about 28 per cent from its 52-week highs but a breakout from a reverse head and shoulder pattern on the daily charts suggests that bulls could ride the momentum for some more time.

Short-term traders can look to buy the stock now or on dips for a possible target of Rs 2,300, suggest experts.

The stock hit a 52-week high of Rs 2,698 on 4th January 2022 but failed to hold on to the momentum. It closed at Rs 1,919 on September 9 which translates into a downside of about 28 per cent.

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The stock took support above Rs 1,400 levels in June and then in July before surpassing the neckline of the inverse head and shoulder pattern placed above Rs 1,800 levels last week.

An inverse head & shoulder pattern is the mirror image of the head and shoulder pattern and is a bullish signal.

It is defined as three bottoms with the middle bottom significantly lower than the other two bottoms.
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On the upside, the first resistance that the stock could face is around the 200-DMA placed at Rs 1,953. A close above this level will add momentum to the bulls to take the stock closer to Rs 2,300 levels, suggest experts.

The stock rose more than 9 per cent in a week and more than 19 per cent in a month which suggests bulls are riding the trend.

The recent price action has pushed the stock near the overbought zone which suggests that there could be some pullback, but any dips can be used as a buying opportunity.

The relative strength index (RSI) is at 74.6. RSI above 70 is considered overbought. This implies that stock may show pullback, Trendlyne data showed. MACD is above its center and signal line, this is a bullish indicator.

CHART CHECK CLEAN 09092022Agencies

On the price action front, the stock is trading above crucial short-term moving averages such as 5,10,30,50-DMA. It is trading above 100-DMA but below 200-DMA on the daily charts.

“On the weekly timeframe of Clean Science we can observe that post the downtrend prices started to make a base which indicated a pause from a prior downtrend,” Vidnyan Sawant, AVP – Technical Research, GEPL Capital, said.

“In the latest week prices have given a breakout from the inverse Head and Shoulder Pattern indicating the beginning of a trend on the upside on the daily charts,” he added.

The breakout was confirmed as higher volume participation is present. Bollinger band plotted on the Daily timeframe has started to expand which tells that the volatility for the prices to go higher is rising.

“RSI plotted on the daily as well as on weekly timeframe have sustained above 50 mark, which reflects the rising momentum in the stock,” he said.

“Going ahead we expect the prices to go higher further till the level of Rs 2,300 where the stop loss must be placed at the level of Rs 1,717 on the closing basis,” recommends Sawant.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)